Protectionism is splitting EAC Common Market - UMA

Trucks at Busia border. Since September, Uganda has not exported sugar to Kenya. PHOTO | FILE

What you need to know:

  • Citing Uganda and Kenya, he said they are all protecting their goods, a situation that partly explains why Uganda came up with the Buy Uganda, Build Uganda policy.

The Uganda Manufacturers’ Association (UMA) has called for stronger regional mechanisms to resolve disputes which are blocking free movement of goods and services within the East African Community member states.

In an interview yesterday, Mr Daniel Birungi, the executive director UMA, said Ugandan products have failed to access the Rwanda market for three years and Kenya has blocked all Ugandan manufactured goods from accessing its market to protect its local industries.

“We have markets that we have failed to access for three years. Some transit routes are no longer available. Kenya has banned LPG gas canisters, confectionaries, sweets and petroleum jelly. The easier question to ask, is what haven’t they blocked?” he asked.

He said there is need to create regional mechanisms to resolve disputes that hinder free movement of goods within the common market instead of the governments protecting their markets and yet they signed up the Common Market Protocol because the market forces will sort out the fears they are fronting to protect their products.

During her new year message, the first deputy prime minister and minister for East African Community Affairs Rebecca Kadaga said for the last two weeks, she has been engaging  the Kenyan government to allow Ugandan poultry products to access their market after threatening to ban theirs here too.

“I put in my energy two weeks ago, Kenyans reciprocated to our threats to ban their imports. We have a new problem with sugar which was impounded in Kisumu which I want to work on. We shall continue engaging to ensure that the Common Market protocol is respected,” she said explaining that as a country, we have agreements under the East African Common Market protocol, Customs Union to give common standard tariffs for goods produced within the region.

Common  Market

In January 2010, Uganda Kenya, Rwanda and Tanzania signed the second regional integration milestone of the Common Market to accelerate economic growth and development among member states. It meant that member states would maintain a liberal stance towards free movement of all factors of production, goods, services, labour, services and capital among others.

When asked yesterday how they have benefitted from the regional market, Jim Kabeho, the chairman Uganda Sugar Millers Association, said they market has remained fragile since there have been no rules and penalties against individual members states because there are no mechanisms to operationalise the protocols that were agreed upon.

“Since September, Uganda has not exported sugar to Kenya. We are just in talks as a delaying tactic, there is no free trade. We agreed on the protocols but we did not put penalties. That is why we want the East African Court of justice to go commercial,” he said.

Thaddeus Musoke Nagenda, the acting chairman Kampala City Traders Association, observed that all the East African community member states are being selfish by protecting their goods.

Citing Uganda and Kenya, he said they are all protecting their goods, a situation that partly explains why Uganda came up with the Buy Uganda, Build Uganda policy. But he said this should be changed to Buy Uganda, Enjoy Quality so that the slogan isn’t selfish since “We are building the East African Market, SADC and COMESA which is not just within EAC.”

He said Kenya and Uganda have failed to trade off comparative advantage of what each country can produce at a cheaper price.  Instead, they have all gone into local production of the same products struggling for the same market; thus causing conflict of interest.

These developments come at a time when Democratic Republic of Congo and South Sudan are struggling to join the regional trading bloc. 

Protectionism

Protectionist tendencies exhibited by some member states are mainly driven by the desire to shield certain sectors from foreign rivals.

The instinct to protect one’s own economy — the jobs and welfare of citizens — appears logical, but we have learnt that it is not: we know that retaliatory protectionism leads to an aggregate loss of trade, investment and wealth.

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