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Trade Regime

According to Article 74 of the Treaty:

In order to promote the achievement of the objectives of the Community as set out in Article 5 of this Treaty, and in furtherance of Article 2 of this treaty, the Partner States shall develop and adopt an East African Trade Regime and co-operate in trade liberalization and development in accordance therewith.

Article 75(1) of the Treaty, on Establishment of a Customs Union, provides that:

For purposes of this Chapter, the Partner States agree to establish a Customs Union details of which shall, inter alia, include the following:

1. Application of the principle of asymmetry;
2. The elimination of internal tariffs and other charges of equivalent effect;
3. Elimination of non tariff barriers;
4. Establishment of a common external tariff;
5.  Rules of origin
6. Dumping;
7. Subsidies and countervailing duties;
8. Security and other restrictions to trade;
9. Competition;
10. Duty drawback and remission of duties and taxes;
11. Customs cooperation;
12. Re-exportation of goods; and
13. Simplification and harmonization of trade documentation and procedures.


Finally, Article 75(7) of the Treaty provides that:

For purposes of this Article, the Partner States shall within a period of four years conclude the Protocol on the Establishment of a Customs Union.

The Articles quoted above indicate that during the Treaty negotiations, matters on the East African Trade regime, stipulating the process of trade liberalization and development in the East African Community, were not finalized. These were left out to be concluded later during negotiations on the Establishment of an EAC Customs Union, in accordance with Articles 75(1) and (7) of the Treaty.

The above was a departure from the EAC Co-operation Treaty of 1967, which had provisions institutionalizing the East African Common Market.

FRAMEWORK OF THE EAC CUSTOMS UNION NEGOTIATIONS

At the signing of the Treaty in November 1999, the Council of Ministers (Ministers/Cabinet Secretaries responsible for regional co-operation of each Partner State) established a High Level Task Force (HLTF) on implementation of Article 75(7) of the Treaty.  The Task Force, comprising of senior officials of the Partner States, was charged with the responsibility of conducting negotiations on the EAC Customs Union Protocol. The Task Force was to report progress of its work to the Council.

However, at its meeting held in November 2001, the Council of Ministers expressed concern at the slow speed the High Level Task Force was taking to conclude negotiations on the outstanding matters. To expedite negotiations, the Council directed that a Committee of Permanent Secretaries responsible for Trade, Industry, Finance and Regional Cooperation to address outstanding matters, with a view to finalizing a draft protocol by March 2002.

This decision of the Council, therefore, removed the mandate of spearheading Customs Union Protocol negotiations from the HLTF   to the Committee of Permanent Secretaries.  The Task Force now handles technical matters and reports to the Committee of Permanent Secretaries, which in turn reports progress of negotiations to the Council.