In a disclosure by the EAC Secretariat, a distinct shift in trade patterns among East African Community (EAC) member states has emerged, indicating increased engagement with countries outside the bloc. This deviation from intra-regional trade is attributed to ongoing trade disputes and non-tariff barriers (NTBs), which continue to hamper trade and impede regional integration efforts.
The EAC’s finalized Trade and Investment Report (2022) unveiled a noticeable trend where member countries have intensified trade relations with countries such as the United Arab Emirates (UAE), the United States, China, India, Japan, and West African nations.
Secretary-General Peter Mathuki highlighted the persistence of NTBs imposed by partner states as a primary impediment, resulting in intra-EAC trade remaining at a low 15 percent in 2022.
While acknowledging this challenge, efforts are underway to address existing NTBs and discourage the imposition of new ones, aiming to revitalize intra-EAC trade in the foreseeable future.
Despite successfully resolving 23 out of 33 NTBs, imports by EAC member states from the UAE, India, China, and the US have notably surged. Simultaneously, exports to regions such as the Economic Community of West African States (Ecowas), Japan, and Africa have experienced substantial growth.
However, persistent trade disputes among member states persist. Notably, Kenya and Uganda have been embroiled in long-standing disagreements, particularly concerning milk imports and an oil procurement deal, straining trade relations.
Complicating matters further, the EAC continues to import sensitive goods from outside the bloc due to inadequate local production capacities. These imports have posed challenges in implementing the revised EAC Common External Tariff, leading to frequent requests for stay applications by partner states.
To boost intra-regional trade, the EAC implemented a new four-band tariff structure in July 2022. This revised tax regime aims to reduce reliance on stay applications and foster trade, investments, and employment. Notably, raw materials and capital goods attract zero percent import duty, while sensitive items incur tariffs higher than 35 percent.
Furthermore, EAC member states have begun exploring trade opportunities beyond the bloc, engaging under the African Continental Free Trade Area (AfCFTA) and strengthening bilateral relations with nations like India.
Efforts such as the India-EAC Summit in New Delhi, organized by the Indian Economic Trade Organisation and the India Africa Trade Council, aim to bolster business ties between India and EAC nations like Uganda, Kenya, Tanzania, and Rwanda.
