NAIROBI: Uganda has received the support of the East African Community Secretariat in its sugar and rice trade disputes with Kenya and Tanzania respectively. The Secretariat said the disputes go against the spirit of integration and free movement of goods and services in the region.
According to the EAC, by requiring Ugandan traders to have permits to export sugar to Kenya, the country is imposing a non-tariff barrier, contrary to the EAC Treaty.
“Sugar exports to the EAC partner states are duty-free and quota-free under the EAC Customs Union if wholly obtained from the partner states. This means that as long as the sugar is locally produced in Uganda the traders can sell it in Kenya or in any of the other partner states without having to be issued with permits or licences,” said Peter Kiguta, EAC Director-General in charge of Customs and Trade.
The EAC Secretariat’s position highlights the contradiction of one country having dual membership of different trading blocs. Kenya and Uganda are members of the Common Market for Eastern and Southern Africa (Comesa), under which permits and quotas — forms of non-tariff barriers for sensitive goods like sugar — are allowed in order to protect industries in member countries.
However, under the EAC, such products only attract punitive import duties ranging from 100 per cent to 35 per cent if they are imported from outside the region and sold to partner states — meaning the bloc relies solely on tariffs to protect domestic industries.
In the 2015/2016 budget, the EAC partner states increased import duty on sugar from $200 per tonne, or 100 per cent of the value, to $460 per metric tonne, or 100 per cent of the value — whichever is higher. The EAC Customs Union, which came into force in 2005, aims to ease and increase trade between member states.
“There is no such thing as Burundian avocado, Rwandan pineapple, Tanzanian rice, Kenyan beef or Ugandan sugar. These are products produced within the EAC and are bound by the bloc’s Customs Union and Common Market Protocols. The Kenya-Uganda sugar saga is the most unfortunate thing,” said EAC Secretary-General Richard Sezibera at the EAC Manufacturing Summit in Kampala.
Kenya has for the past few weeks been engrossed in a public debate following the recent bilateral talks between President Uhuru Kenyatta and his Ugandan counterpart President Yoweri Museveni in Kampala last month, where Kenya agreed to expedite issuance of sugar permits to Ugandan traders under the safeguards of Comesa.
The sugar row opened the floodgates of trade disputes involving the five EAC member states. Analysts say the disputes have made the region’s journey to full integration longer, and exposed the nationalistic biases that continue to haunt it.
The Common Market Protocol, which was formally launched in July, allows free movement of goods, labour, capital and services in the region. Tanzania complains that Uganda and Rwanda lock out its rice exports by imposing 100 per cent duty instead of 75 per cent as required by the EAC common external tariff.
Uganda said it is imposing the 100 per cent duty on Tanzanian imports because the rice is not locally produced and instead imported from outside the region, but Tanzania said the duty is unfair because the rice is locally grown.
