NTBs major challenge to EAC trade ambitions

How transparent are the EAC countries’ trade policies and practices? What is the quality of public and intergovernmental debate on their trade policies and practices? And what are the effects of their trade policies on the multilateral trading system?

These questions lay at the heart of the second Trade Policy Review for EAC partner States, which was held between November 21 and 23 at the World Trade Organisation (WTO) headquarters in Geneva. The previous review of the EAC was in 2006.

In a nutshell, the Trade Policy review is an exercise, mandated in the WTO agreements, in which member countries’ trade and related policies are examined and evaluated at regular intervals.

Significant developments that may have an impact on the global trading system are also monitored.

The basis for the review is simple. Just as individuals and companies in the EAC that are involved in trade must know as much as possible about the terms of trade in the multilateral system, it is equally important to deepen WTO members’ understanding of the EAC regional, as well as national components, of the respective countries’ trade regimes.

Surveillance of national trade policies is a fundamentally important activity running throughout the work of the WTO.

In the review, significant developments that may have an impact on the global trading system are also monitored. Its frequency depends on the country’s share of world trade.

For instance, the European Union, the US, Japan and China are examined about once every two years. The next 16 countries (in terms of their share of world trade) are reviewed every four years. The rest every six years, with the possibility of a longer interim period for the least-developed countries.

These “peer reviews” take place in the trade policy review body which is actually the WTO General Council comprising the WTO’s full membership, which operates under special rules and procedures.

The reviews are, therefore, essentially peer-group assessments, although the WTO Secretariat does much legwork. They tend to be very comprehensive, measuring all aspects of a country’s economic performance.

In addition, WTO members are also given an opportunity to provide advance written questions, to which detailed written responses are expected.

Key findings for the EAC’s review.
First, the WTO commended the EAC’s progress in increasing regional trade flows through the Customs Union and the Common Market and talks on Monetary Union.

This is notwithstanding major challenges encountered, such as poor infrastructure, (roads and rail), high energy costs coupled with bureaucracy.

Second, the trade review highlighted the fact that non-tariff barriers remain major impediment to trade and business development in the bloc.

Non-tariff barriers affecting intra-EAC trade include non-harmonised technical regulations, sanitary and phytosanitary requirements, customs procedures and documentation, rules of origin, and police road blocks.