Uganda and Kenya Take Steps to Resolve Trade Barriers

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Uganda and Kenya have come to a mutual agreement to eliminate tariff and non-tariff barriers that have been escalating the cost of trade between the two nations.

This strategic decision aims to facilitate smoother trade relations and thereby stimulate economic growth for both countries.

This development came out of the second Joint Ministerial Commission (JMC) meeting held in Kampala from 12th to 14th May 2024 in which Senior Uganda and Kenya government officials that included Ministers and Ambassadors held talks to address the challenge of trade barriers and other multi-sectoral matters that include; trade and investment; immigration and customs; energy and natural resources development; defence and security; health services; standards and quality assurance; water and lands; tourism and culture; among other areas of mutual cooperation.

The Kenyan Cabinet Secretary for Foreign and Diaspora Affairs, Dr Musalia Mudavadi who led the Kenyan delegation told the JMC meeting that the issue of non-tariff barriers is a matter that must be prioritized.

“It is my desire that the issues on Non-Tariff Barriers that have continued to hamper cross-border trade between our countries are further discussed at length and a conclusive position reached to enable the augmentation of bilateral trade,” he said.

He added: “It is also imperative to address other outstanding issues relating to, immigration, boundary reaffirmation which has progressed at a slow pace due to challenges related to funding thereby impacting on the programme of action, and other cross border matters are addressed at the earliest. I am confident we shall reach agreement on these important instruments for enhancing our cooperation.”

The joint communique issued after the lengthy discussions reads that the senior officials from both countries highlighted how the challenge of trade barriers have affected trade flow, but also identified the opportunities existing in their two countries that could be exploited for the socio-economic transformation of their respective citizens.

“They also identified the challenges that have affected the free flow of bilateral trade and agreed to resolve all the tariff and non-tariff barriers in order to promote mutual growth, development and prosperity. In this regard, they directed their technical officials to meet and consult regularly,” the communique reads in part.

By removing these obstacles, they intend to create a more favorable trading environment, encouraging increased economic cooperation and development.

EAC CUSTOMS UNION IGNORED?

Trade between the East African Community (EAC) partner states is guided by the Customs Union which is the cornerstone of regional integration and critical foundation of the bloc.

The EAC customs union has been in force since 2005, as defined in Article 75 of the Treaty for the Establishment of the East African Community.

Under the customs union protocol, EAC member countries agreed to establish free trade (or zero duty imposed) on goods and services amongst themselves and agreed on a common external tariff, whereby imports from countries outside the EAC zone are subjected to the same tariff when sold to any EAC Partner State.

Despite the establishment of the customs union, certain goods originating from East African Community (EAC) member states have still faced non-tariff barriers imposed by some member countries within the bloc.

For example, Kenya has previously imposed restrictions on the entry of Ugandan goods like sugar, poultry products, dairy products, and maize into its market.

Recently, Kenyan President William Ruto announced that Kenya will not import any maize in 2025, citing the country’s bumper harvests in 2023 as the reason.

In January this year, President Museveni described such actions as blind policies.

A RELIEF FOR UGANDAN GOODS

The removal of non-tariff barriers is a huge relief for Ugandan goods such as poultry products, dairy products, and maize that have been denied entry into the Kenyan market.

On June 6, 2023, the East African Community Partner States resolved several non-tariff barriers that had been hindering trade between the countries. These barriers included a 25% excise duty imposed by Kenya on table eggs imported from Uganda, as well as a similar 25% Kenyan excise duty on onions, potatoes, potato crisps, and chips originating from Uganda.

These duties, which had been in effect since July 1, 2022, were addressed to promote smoother trade relations and economic cooperation within the region.

The EAC Partner States also resolved the issue of an import ban and market access denial imposed by Kenya. This restriction was enforced through Kenya’s refusal to issue import permits for powdered milk from Uganda.

The ban was initially implemented as a measure to protect Kenya’s surplus production and stabilize low producer prices within its dairy sector.

The Ugandan Minister of Foreign Affairs, Gen. Jeje Odongo said that finding remedies to challenges that impede the conduct of business between the two East African Community allies is a game changer in enhancing trade between Uganda and Kenya.

“I am confident that if we openly discuss and appropriately resolve these constraints; we will enhance our mutual understanding, deepen our bilateral cooperation, enhance trade between our countries, and promote common prosperity for our peoples,” said Gen Odongo.

The second JMC meeting that concluded in Kampala on Tuesday precedes the official State Visit by President Yoweri Museveni to Kenya from 15th – 17th May, 2024.

The State Visit will provide an outstanding opportunity for both countries to engage in comprehensive discussions and assess the progress made on various bilateral, regional, and international issues of shared interest. This visit will enable leaders to exchange views, strengthen diplomatic relations, and collaborate on strategies to address mutual concerns effectively.

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