'EAC Customs Union needs commitment of partner countries'

Dar es Salaam- Tanzania (PANA) -- Governments of the five member countries of the East African Community (EAC) should refrain from protectionist inclination and g uard their common commitment to the Customs Union that came into force on 1 Janu a ry 2010, a senior official of the regional bloc has said.
Focused mainly on merchandise trade, the EAC Customs Union is to be supported wi th the establishment of a Free Trade Area among the member countries and a singl e customs territory.
Briefing journalists on a fully-fledged customs union, EAC Customs and Trade Dir ector General Peter Kiguta said that member states should refrain from imposing taxes and levies of equivalent effect to tariffs and granting duty exem ptions outside the current customs regime.
Kiguta noted that it took a five-year transitional period - from 1 January 2005 to 31 December 2009 - to put in place mechanisms for making the union operational.
â?The end of the transitional period in December last year was one of the most important landmarks of EAC integration process.
The successful elimination of internal tariffs among partner states was a show of commitment by the people of East Africa to the objectives of the Community.
â?This is what strengthened the commitment of the partner states to launch the implementation of the Common Market in the second half of this year,â? he said.
Under the fully-fledged Customs Union, goods manufactured in one partner state s hall move to another partner state without being charged import duty.
Goods imported into the Customs Union, once modalities for collection and accoun ting for Customs revenue are worked out, now move freely from one partner state to another.
â?We are now engaged in carrying out activities aimed at thrashing out some of the sticking challenges,â? said Kiguta, who cautioned, however, that like in any new undertaking, this may not be working perfectly right now.
â?Nevertheless, we should appreciate that ensuring smooth trade in goods is not a one-off event, but a continuous process,â? he said.
Implementation of the Customs Union, according to the official, calls for commit ment and hard work by the EAC Secretariat, business community and governments of the partner states, namely Burundi, Kenya, Rwanda, Tanzania and Uganda.
He assured that the Secretariat would continue to empower the private sector thr ough dissemination of information, interpretation of legal instruments and, wher e possible, make strategic interventions.
Kiguta pointed out that the new phase has a number of implications on the busine ss landscape of the region for both the private and public sector as goods circu l ate more freely in the Customs Union than ever before.
â?Indeed, with the implementation of the Common Market protocol, it is expected that there will be free movement of persons and capital.
The effect of this fr e edom shall be increased cross border investment in all the sectors of the East Africa n economy.
Ultimately, the new business climate will increase profitability, inc o mes and general welfare of the people of East Africa,â? he explained.
Broadly, it is expected that the new stage will have a positive impact on alloca tion of resources in the region, exploitation of scale of economies, profit marg i ns, distribution of income, market size, efficiency of production and balance of trade in intra r egional trade.
Kiguta said the EAC Secretariat was developing a manual on operationalisation of Export Processing Zones (EPZs) so that the region opens up more trading and inv e stment frontiers.
On the movement of goods, Kiguta urged the EAC partners to adopt best practices such as risk-based post-clearance audit and pre-audit release of goods so as to m inimise dwell time at borders and ports.
He said the Secretariat was implementing a simplified trade regime at border ent ry points to support small-scale traders.
â?We are also commissioning a study to identify eight products commonly traded in EAC, with a view to identifying obstacles they face and eliminate them.
â?Tangible gains from regional integration are directly and indirectly related to the velocity of movement of goods across partner states.
The freer and faster the movement, the more the gains,â? he added.
Meanwhile, the EAC Secretariat is working on a regional work plan to enable the partner states to take advantage of export markets under the African Growth and O pportunities Act (AGOA) - the US Act which offers tangible incentives for African countries t o continue their efforts to open their economies - after the EAC signed a Trade a nd Investment Framework Agreement (TIFA) with the US.
Kiguta announced that the EAC-USA TIFA Council will be launched next month.

14 january 2010 11:31:00

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