East African Community (EAC) member states remain divided over revisions to the Common External Tariffs (CET), with negotiations extending beyond the June deadline. The dispute centers on conflicting demands for preferential treatment of goods like assembled vehicles, tobacco, and confectioneries, while enforcement gaps threaten regional trade integration.
A 2017 border incident at Busia underscored challenges in implementing the CET, as Ugandan traders transported goods without duties on small consignments. Kenya advocates for a four-band tariff system to replace the current three-tier structure, arguing that the existing framework discourages value addition by levying uniform duties on raw materials, intermediates, and finished products. Ugandan officials oppose the change, while the Kenya Association of Manufacturers (KAM) criticized the current system for stifling domestic industry growth.
EAC Cabinet Secretary Adan Mohamed highlighted the erosion of the CET's effectiveness due to exemptions and stay-of-application requests from member states. "Lobbying by private interests often overrides regional economic priorities," he said, citing concerns over unregulated imports and distorted market dynamics. Specific disputes include Tanzania's refusal to grant duty-free access to Kenyan confectioneries and cigarettes, which it claims fail to meet preferential treatment criteria.
KAM Chairman Sachen Gudka emphasized that the three-band structure clusters duties on raw materials, intermediates, and finished products, discouraging value addition. "For instance, importation of both fabric (raw material) and garment (final product) is charged 25% import duty," he said. Kenya also seeks special treatment for Scania vehicles and British American Tobacco products, prompting accusations of unfair trade practices.
Manufacturers warn that the CET's relevance may diminish with the rise of continental free trade agreements, urging Kenya to focus on global competitiveness. Despite calls for harmonized policies, disjointed approaches by Kenyan ministries have complicated negotiations, with the government now pushing for a unified stance ahead of upcoming talks in Arusha.
