East Africa: Uganda, Tanzania Win Round One in EAC Talks
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The Monitor (Kampala)
2 September 2008
Posted to the web 2 September 2008
Dorothy Nakaweesi
Kampala
After a spirited appeal, Uganda, Tanzania, Rwanda and Burundi, considered poorer than Kenya, will have some protection from trade imbalances, as the region prepares for a free movement of goods, services and labour come 2010.
The purpose of the decision is to ensure that all member states get equitable treatment in trade matters and encourage the development of domestic industrial capacities expected to form a greater economic force against none members in future.This follows the EAC secretariat's decision last week to agree to include in the protocol clauses that will protect private businesses in those countries once the Common Market gets underway in 2010.
The EAC reached the decision at a negotiation meet in Nairobi in preparation for the region's entry into a Common Market, the second stage of the integration process after the Customs Union.
It also follows alleged threats by Uganda and Tanzania's private sector players to withdraw from the negotiations unless a compensatory fund is established to protect them was considered.
"Uganda, Tanzania, Rwanda and Burundi are classified as least developing countries unlike Kenya, which has more industries. What we want is protection of the poorer economies," PSFU representative at the meeting Mr John Ssempebwa told Business Power after the meeting last week. The need for balanced trade among partners prior to the Common Market is a precondition to cushion against businesses closures, job loses and labour flight that led to the collapse of the EAC in 1977.
At the time, Uganda imported more from Kenya than Kenya did from Uganda and the case has not changed much to-date. A fund will be created to which all members will contribute. In case a poorer country suffers a trade imbalance during the Common Market, money from this fund will be used for compensation.
The talks also agreed to defer discussions on the liberalisation of education in the region. Uganda is considered the hub of education service in the region with 50 per cent of students in Uganda said to be from the region's market. Once liberalised, Uganda's education industry could suffer an erosion of its competitive advantage.
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Ten years will be allowed for the growth of local construction and the re-insurance industries before persons and firms from Kenya are allowed to enter other partner states.
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