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TRADE POLICY REVIEW:

Concluding remarks by the Chairperson

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1. This first joint Trade Policy Review of the East African Community (EAC) members has allowed us a better understanding of their trade regimes, and of their policies and aspirations. Our dialogue has been thorough and comprehensive, stimulated by the full and open engagement of the high-level delegations of Kenya , Tanzania and Uganda , as well as of the EAC Secretariat. Our thanks are also due to our discussant for his very insightful contribution.

2. Members commended EAC partner states for the progress achieved, despite adverse consequences of droughts, in their economic reform programmes in which trade and investment liberalization had played a key role. In the light of their recent macroeconomic performance, EAC partner states were encouraged to move ahead in implementing structural reforms so as to build up an environment conducive to sustainable economic growth and development . Reforms in the energy subsector would help by reducing production costs, particularly in the manufacturing sector.

3. Members appreciated EAC partner states’ firm commitment to the multilateral trading system, including the Doha Development Agenda. They welcomed efforts made by EAC partner states in simplifying their tariff regime. Nonetheless, some Members emphasized that lack of harmonization within EAC in certain key trade measures, such as internal taxes , customs procedures, other duties and charges on imports, and fees on production, undermines the utility of having a common external tariff. They expressed hope that the full establishment of the customs union, and harmonization of monetary and fiscal policies would contribute to the further integration of its members into the global economy. EAC partner states were also encouraged to reduce their bound rates, enlarge the scope of their tariff bindings, eliminate their applied compound tariffs (all bound duties being ad valorem ), and Kenya and Tanzania to remove their other duties and charges bound at zero.

4. Members noted that EAC partner states were benefiting from non-reciprocal preferences, while also participating in various preferential trade arrangements. Several Members called attention to the complications of trade policy making stemming from membership in overlapping preferential arrangements. This was not only difficult to manage, given the limited resources available, but could also detract from multilateral efforts.

5. Members encouraged EAC partner states to further liberalize their services sector, and enhance their commitments under the GATS. Members also sought clarification on a number of issues, notably: customs procedures and valuation, including pre-shipment inspection; contingency trade remedies; standards and SPS measures; state-owned enterprises and privatization; government procurement; protection of intellectual property rights; and agriculture and related activities.

6. Members expressed their appreciation for the comprehensive responses to their questions as provided by the delegations of EAC partner states [and looked forward to further responses].

7. In conclusion, the numerous interventions, questions in particular, by Members during this Review are indicative of their interest in EAC partner states’ trade regimes. Members value EAC partner states’ efforts to improve their economic environment and reduce poverty. As small economies that are highly dependent on foreign trade, they have a lot to gain from an open trade environment. I encourage them to continue improving their multilateral commitments, both on goods and services, with a view to enhancing the predictability and credibility of their trade regimes. Trading partners can help by ensuring that their markets are fully open, and by providing appropriate technical assistance; the recent Aid for Trade initiative could also help.

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