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EAC intra-trade reaches impressive new heights
2008-05-03 09:38:00
By Perege Gumbo, Arusha
Trading between the member states of the East African Community (EAC) gets rosier on each passing year, particularly after the creation of the East African Customs Union (EACU) two years ago.
The value of traded goods and services within the region jumped up from USD 778 million in 2004 to a staggering USD 1.164 billion at the end of 2006, the figure excluding cross-border trade Burundi and Rwanda, countries which joined the bandwagon just recently.
Juma Mwapachu, Secretary General of the EAC, told delegates from the five East African member states attending a one-day seminar on Common Market Sensitisation Forum for Business Community here yesterday that present trends would as well enhance tax revenue earnings among individual member countries.
Following remarkable improvement in intra-trade, he urged for an increased pace towards realisation of the common market dream.
Envisaged common market, he said, would further increase opportunities for businesses to tap the economies of large scale production, as all obstacles to trading would have been planed down, hence lower the longer runs costs of production while enhancing competitiveness of firms across the board.
In 2004, the EAC moved to the Customs Union stage of regional co-operation which entailed taking away of internal tariffs and all non-tariff barriers on intra-trade while maintaining a common external tariff region.
Tanzania and Uganda, whose manufacturing sectors are weaker compared to that of Kenya had first feared that removal of internal tariffs would adversely affect their revenue sources, thereby plunging them into fiscal mess, which has never been the case so far.
Ambassador Mwapachu said that as the relevant organs of the East African member states negotiate on how best to implement East African Common Market, business community, on its part, should reread on its role as engines of growth.
Key issues on focus over envisaged common market include free movement of labour, right of residence and establishment, right to provide and receive services, among others.
Mwapachu said that in the beginning of the Customs Union implementation, nationalistic fears were ample, but insisted now partner states should consistently forge towards the right direction of removing all tariff barriers and enhance even more intra-trading activities.
He also notified delegates that the EAC Secretariat has already secured USD2.2million from Germany for purposes of enhance harmonisation of tariffs within the region.
``We`re also developing a proposal for negotiating with the African Investment Climate Facility to provide us with finds for tariffs harmonization as well,`` he said.
He said that in order for the partner states to fully benefit out of the envisaged common market, they should work hard to remove economic disparities through harmonisation of institutions such as land and labour laws.
The Chairman of the East African Business Council Arun Devani said in the current globalised world, strong common market was inevitable and urged participants to ensure the envisaged market becomes people driven.
The EAC member states include Kenya, Uganda, Tanzania, Rwanda and Burundi.
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