Non-tariff barriers in EAC customs union: implications for trade between Uganda and other EAC countries

Abstract

A key objective for the adoption of East African Community (EAC) Customs Union was to enhance economic gains through elimination of tariffs and non-tariff barriers (NTBs) within the member states. This study has established that several NTBs continue to exist, and some have persisted. The NTBs that have persisted for more than three years include a long list of customs documentation requirements, cumbersome formalities, and limited testing and certification arrangements. Other NTBs that still exist include: un-standardized weighbridges; several road blocks; lack of recognition of individual country’s standards; and the existence of several un-harmonised standards. The simulation results of spatial equilibrium model of maize trade with and without NTBs show that at the EAC level there are positive production, trade and welfare implications attributable to elimination of NTBs in intra-regional maize trade. The gains are greatest in trade and production in Uganda compared to Kenya and Tanzania. To eliminate the existing NTBs and to reduce the possibility of new ones being created, first and foremost, the EAC countries need to design effective mechanisms for identifying and verifying information about NTBs and ensuring their elimination. This will require giving the EAC Secretariat the mandate to compel individual countries to eliminate any identified NTB and to ensure that no new ones are created. Second, policy and legislative decisions made by, for example, Council of Ministers should be communicated in time for effective implementation. Broadly, the Government of Uganda (GoU) needs to examine the trade barriers identified in this study and remove those that are internally instituted while working with the rest of the member states to remove those externally imposed. In the specific and medium term, standards should be harmonized and enforcement of compliance be transferred to one regional body, such as EAC Bureau of Standards. In the short run, the EAC countries should develop a mutual recognition of standards across member countries. Furthermore, EAC member states and other key stakeholders such as private sector associations need to launch public awareness campaigns to disseminate information about customs union and its economic opportunities. There is also a need for full commitment to the implementation of customs union protocol by all the member states.