EAC Signs Trade Pact to Remove Barriers

East African countries have signed an agreement with regional commodity dealers that will enable them participate more in policy-making and facilitation of trade.

The agreement signed in Nairobi late Wednesday will also remove non tariff barriers and allow free movement of food and trade in the region.

The agreement was signed between East African Community (EAC) and the Eastern Africa Grain Council (EAGC), Africa Cotton and Textile Industries Federation and the Eastern and South African Dairy Association.

Some countries have either imposed bans or increased tax citing protection of their domestic markets from increased competition.

Speaking during the signing ceremony, EAC deputy secretary-general Julius Onen said the move will complete the 'missing link' in the regional integration.

This will bring the private sector to the fore of the East Africa integration and fill the missing link in policy formulation at the secretariat. he said.

Onen said the potential for intra-regional trade in agricultural goods was immense, particularly for the maize and dairy although currently most of the countries relied on imports from outside the region.

We have eliminated most barriers in East Africa, but through the MoU, we hope to open the window of opportunity for the private sector to play a key role in ensuring food availability and eventually eliminate food scarcity, he said.

Onen said the region could also boost its industrialization based on raw materials readily available in the region like cotton. He said vertical integration in the cotton and textile sector through regional value chain would boost the sector.

He said the agreement was crucial in reducing the high cost of food in eastern and southern Africa but called on regional governments to play a bigger role in reducing trade barriers.

Governments must still invest and support these sectors in a pragmatic way because we need sustainable trade and food supply situations," he said. "Experiences from the European Union and the Americas have shown that everyone benefits when we have borderless economies, he added.

Kenya with a comparatively developed dairy sector is exploiting the regional market.

There used to be a huge trade balance in favour of Kenya but Uganda has closed up the gap by increasing its exports. he said.

The East Africa Community is the single largest market for Kenya, exports reaching 34 billion shillings for Uganda and 22 billion shillings for Tanzania in 2007.

Source: American Shipper