East African trade disputes grow

NAIROBI – Festering trade disputes between the three members of the East African Community (EAC) grew on Monday as Kenya accused neighbouring Uganda of violating eight-month-old regional customs rules.

Just a week after Kenya and Tanzania traded charges of non-compliance with the EAC common tax regime that took effect on January 1, Nairobi hit out at Kampala for cheating on a list of firms entitled to import duty free goods within the bloc. On January 1, the EAC members signed an agreement to create a three-way Common Customs Union to free up cross-border trade worth US$90 billion (N$567 billion) in the region, which is home to about 90 million consumers.Owing to Uganda’s weak economy, the country was allowed to give a list of items to be exempted from duty.But Kenyan Trade Minister Mukhisa Kituyi said Uganda had submitted an erroneous list of companies authorised to import the duty-free goods, suggesting the country was trying to subvert customs rules at the expense of other bloc members.”More than 50 per cent of the companies either did not exist, or if they existed, they did not do the things they were supposed to be doing,” he told a press conference here.Kituyi said Uganda had violated the trade rules by importing duty-free raw materials and later selling finished products back to its neighbours and other regional countries without paying tax.”You want to give Uganda a competitive advantage over Kenya in the export of products into the larger …market,” he said.”National interests also have to be involved on how we negotiate, how much more concession should be given to Uganda.”The Kenyan minister maintained that the agreed trade terms, under which Uganda can export items to Kenya duty-free while Kenya pays duty on a list of goods selected by Uganda, was sufficient to protect the latter’s developing industries.The Kenya-Uganda furore came a week after Tanzanian traders accused Kenya of violating the treaty by reducing tariffs on pharmaceutical products from 10 per cent to zero.The Tanzania Private Sector Foundation (TPSF) threatened to sue unless Nairobi reinstated the tariffs on imported pharmaceuticals except medicines treating malaria, tuberculosis and HIV-AIDS.The TPSF fears that the move would cripple the EAC pharmaceuticals industry by making drugs imported from outside the community more attractive than those produced domestically.Kituyi said the country had a right to present its complaint before the EAC’s Court of Justice if it feels the decision violates agreed regulations.-Nampa-AFPOn January 1, the EAC members signed an agreement to create a three-way Common Customs Union to free up cross-border trade worth US$90 billion (N$567 billion) in the region, which is home to about 90 million consumers.Owing to Uganda’s weak economy, the country was allowed to give a list of items to be exempted from duty.But Kenyan Trade Minister Mukhisa Kituyi said Uganda had submitted an erroneous list of companies authorised to import the duty-free goods, suggesting the country was trying to subvert customs rules at the expense of other bloc members.”More than 50 per cent of the companies either did not exist, or if they existed, they did not do the things they were supposed to be doing,” he told a press conference here.Kituyi said Uganda had violated the trade rules by importing duty-free raw materials and later selling finished products back to its neighbours and other regional countries without paying tax.”You want to give Uganda a competitive advantage over Kenya in the export of products into the larger …market,” he said.”National interests also have to be involved on how we negotiate, how much more concession should be given to Uganda.”The Kenyan minister maintained that the agreed trade terms, under which Uganda can export items to Kenya duty-free while Kenya pays duty on a list of goods selected by Uganda, was sufficient to protect the latter’s developing industries.The Kenya-Uganda furore came a week after Tanzanian traders accused Kenya of violating the treaty by reducing tariffs on pharmaceutical products from 10 per cent to zero.The Tanzania Private Sector Foundation (TPSF) threatened to sue unless Nairobi reinstated the tariffs on imported pharmaceuticals except medicines treating malaria, tuberculosis and HIV-AIDS.The TPSF fears that the move would cripple the EAC pharmaceuticals industry by making drugs imported from outside the community more attractive than those produced domestically.Kituyi said the country had a right to present its complaint before the EAC’s Court of Justice if it feels the decision violates agreed regulations.-Nampa-AFP