Trade Regime

    The EAC Customs Union Protocol furthers the liberalisation of intra-regional trade in goods; promotes production efficiency in the Community; enhances domestic, cross-border and foreign investment; and promotes economic development and industrial diversification; Trade Facilitation - The Partner States have agreed to cooperate in simplifying, standardising and harmonising trade information and documentation so as to better facilitate trade in goods. The Customs Union Protocol spells out the rules and regulations that are to govern trade within and outside the Community. The key pillars of the EAC Customs Union are the Common External Tariff and the EAC Rules of Origin and the Customs Management Act 2005. The current EAC Common External Tariff (CET) is structured under three bands of 25 percent for finished goods,10 percent for intermediate goods and 0 percent for raw materials and capital goods. In addition, there is a limited number of products under the sensitive list that attracts rate above the maximum of 25 percent. CET is currently being reviewed and Partner States have in principal agreed on a four-band structure. The EAC Single Customs Territory (SCT) came into effect in 2014. Implementation of the SCT is aimed at improving trade facilitation through introduction of ‘hard and soft infrastructure’. There has been increased trade and investment in the EAC as a result of elimination of non-tariff barriers based on an online monitoring and tracking system, improved infrastructure like the One Stop Border Posts (OSBP), introduction of the Integrated Border Management (IBM) and use of Information, Communication and Technology (ICT).

     Under Article 81 of the Treaty Establishing the Community, the EAC Partner States recognised the importance of standardisation, quality assurance, metrology and testing (SQMT) for the promotion of trade and investment and consumer protection, among other things. Under Article 13 of the Customs Union Protocol, the EAC Partner States have agreed to remove all existing non-tariff barriers to trade and not to impose any new ones. Also, Re-exports are exempted from the payment of import or export duties. The areas of cooperation in the Customs Union are: (i) Customs administration; (ii) Matters concerning trade liberalisation; (iii) Trade related aspects including the simplification and harmonisation of trade documentation, customs regulations and procedures; (iv) Trade remedies; (v) National and joint institutional arrangements; (vi) Training facilities and programmes on customs and trade; (vii) Production and exchange of customs and trade statistics and information; and (viii) The promotion of exports.  The EAC Customs Management Act 2004 governs the administration of the Customs Union, including legal, administrative and operational matters.  The newly established Directorate of Customs under the EAC Secretariat will identify policy issues and coordinate and monitor customs and trade-related activities in the EAC. The Community has developed anti-dumping regulations, as elaborately highlighted in the EAC Customs Union Protocol.  The Community also put in place an EAC Competition Policy and Law with an aim to deter any practice that adversely affects free trade within the Community. Its implementation agency, the EAC Competition Authority, deals with all competition issues having cross-border effects. In principle, domestic competition issues remain under the jurisdiction of national competition laws and institutions.

    The EAC has increased market access to EAC goods and services by entering into a number of key trade agreements such as; (a) the Tripartite Agreement between the EAC, SADC and COMESA to establish a Tripartite Free Trade Agreement (TFTA); (b) the US-EAC Trade and Investment Agreement; and (c) the Economic Partnership Agreement (EPAs) aimed at the formation of a free trade area between the EAC and the European Union (EU) which has been signed by two Partner States, i.e. Republics of Kenya and Rwanda. EAC Partner States have also ratified the African Continental Free Trade Agreement (AfCFTA) that will integrate the EAC regional economy into the African continental trade and bring about sustainable trade and investment opportunities and unleash the region’s growth potential.