East African Community considers a borderless market

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East African Community
East African Community

East African traders would have a borderless regional trading system by 2010 to allow for free flow of goods, services and investments across the region with a total population of 120 million, the East African Community (EAC) said on Tuesday.

The five EAC states have kicked off negotiations for the establishment of the East African Common Market aimed at easing the flow of trade between the five states – Kenya, Uganda, Tanzania, Rwanda and Burundi.

The talks opened in Kigali, Rwanda, on Tuesday amidst strong expressions that the December 2008 deadline for the conclusion of the common market deal should be achieved.

The Common Market is expected to be launched two years after conclusion of the negotiations in December 2008. The EAC has operated a Customs Union since 2005.

The Customs Union allows trade on 25% taxation for finished goods and 10% on semi-processed goods. Raw materials are traded tax-free across the region.

Rwanda’s East African Affairs Minister Monique Mukaruliza called for dedication to East African unity, emphasizing that the region would only benefit from regional trade if it “intensified and deepened regional integration”.

Mukaruliza urged the EAC to act resolutely in pooling the entire region’s resources as well as enhance the private sector competitiveness regionally and in the international markets to uplift the standard of living in the region and reverse the trend of EAC’s shrinking share in world trade.

A high level task force on the negotiations for the Common Market is convening in Rwanda, bringing together senior officials of Government and representatives of the business community and civil society of the region.

The Rwandan minister said the Common Market was of paramount interest and strategic significance that would lay the basis for people-centred political federation envisaged in the Treaty for the Establishment of the EAC.

The experts are expected to develop a model Protocol on the Establishment of the East African Common Market that has been prepared.

The draft Protocol provides, among others, for free movement of factors of production, right of settlement and establishment of EAC citizens within the EAC, including the free movement of goods that is already applicable under the EAC Customs Union.

Mukaruliza noted that the EAC states had agreed and were implementing many aspects of the Common Market within the ongoing EAC integration process.

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