Nduva Seeks Law Changes to End Trade Spats in EAC 

Thursday September 26 2024

EAC Secretary-General Veronica Nduva addresses the Kepsa-EAC SG Roundtable in Nairobi, Kenya on August 14, 2024.

By LUKE ANAMI

Bilateral agreements to resolve contentious trade disputes within the East African Community Common Market have not always been successful, prompting the Secretariat to step in to legally resolve them as they hurt intra-regional trade and integration.

The EAC has been unable to eliminate non-tariff barriers (NTBs), with 10 still pending and resolution of others at different levels.

Cumulatively, 274 NTBs have been resolved since 2007, but the trading in milk, poultry, cereals (maize), juice and other agricultural products has remained contentious in the past 10 years, often making a mockery of both the Customs Union and the Common Market protocols.

This has partly been blamed on the lack of operationalisation of the EAC Trade Remedies Committee, which has remained dormant for more than seven years now.

Denis Karera, vice-chair of the East Africa Business Council, told The EastAfrican that, over the past seven years, every time the discussion on trade remedies comes up, it dies immediately – “meaning there are parties within us who have no interest in seeing trade remedies implemented.” 

Trade remedy laws, which are domestic or international, seek to prevent bad trade practices among countries. They range from anti-dumping to countervailing and safeguard measures.

Adrian Njau, acting CEO of the EABC, said that the lobby has been pushing the amendment of Article 24 of the EAC Customs Union Protocol, which provides for the establishment of the East African Community Committee on Trade Remedies, to constitute the team.

 “The Protocol provides that the Committee on Trade Remedies shall be composed of nine members who are competent in matters of trade, customs and law, and that each partner state shall nominate three members to the Committee,” Mr Njau said.

But only Burundi has responded, much to the frustration of the Secretariat. 

Secretary-General Veronica Nduva said they had asked each partner state to produce the report by June this year, but by September only Gitega had ratified the article that would bring to effect the Trade Remedies Committee.

She cited the Brookside milk saga between Kenya and Uganda blaming it on the lack of the trade remedies mechanism.  

Ms Nduva is looking to fast track the Trade Remedy Committees to resolve the outstanding trade disputes.

“We have had the Brookside milk saga for so long now. If we had the Trade Remedies Committee, this matter would not be with us,” she said.

“One of the commitments I would like to make is that I will be directly   engaging with the Justice and Legal Affairs Committee, the Sectoral Council, and bring to their attention that there are a number of things that are not moving because they are stuck at their doorstep,” the EAC boss said.

The Secretariat is also working towards establishing the Competition Regulations and Dispute Settlement Mechanism, and Nduva expects it to be finalised by the end of the year.

The Brookside row and the longstanding dispute between Kenya and Tanzania over maize imports have re-energised the push for the formulation of an Act to end trade disputes.

Uganda has lately faced difficulty in exporting its agricultural products to Kenya.

In 2023, Kampala reached a significant milestone in its dairy industry, with milk production surpassing the three-billion-litre mark for the first time. According to data from the Dairy Development Authority (DDA), the country produced 3.85 billion litres of milk in the financial year 2022/23, representing a 37 percent increase, compared with the 2.81 billion litres produced in the previous financial year.

Despite a surplus in milk supply, efforts by Uganda to export milk to Kenya have always been marred by blockages and frustrations.

At the centre of it, Brookside is the Kenya Dairy Board (KDB), accused of selectively allowing milk imports from Ugandan processors while locking out Brookside, which has operations in both countries.

According to the private sector in Uganda, trade relations between the two countries continue to hurt Ugandan dairy farmers through continuous bans and denial of export permits for Uganda dairy products as well as poultry, sugar and other agricultural products.

This is despite efforts by President Yoweri Museveni, during his state visit to Kenya in May, signing a memorandum with Kenya’s William Ruto to facilitate trade between the two partner states.

Simon Kaheru, EABC Uganda chapter vice-chair, says that a section of traders have not resumed exports to a level that can comfortably confirm that the situation is back to normal. 

“The processes involved in trade are not the simple switch-on-switch-off. Everybody is being cautious, because of the bad experiences that keep recurring. This is why we must discourage trade disruptions of any kind,” Mr Kaheru said.

Brookside Ltd, owned by the family of former president Uhuru Kenyatta, says it has been hard hit in the ongoing NTBs.

“Trade is about trust, and it is like a mirror: once a mirror is broken, it does not matter how much you glue the pieces back together, it is difficult to use for a long time after that,” Mr Kaheru told The EastAfrican.

In August this year, traders at the Namanga border post between Kenya and Tanzania protested Kenya's move to impose new levies on the sale of cereals, legumes, herbs and tubes, saying the move violates regional trade agreements.

And on the coast, shippers and clearing and forwarding agents want the Agriculture and Food Authority (AFA) to reconsider the imposition of a two percent levy on the customs value of grain imports and a 0.3 percent levy on exports.

But acting AFA director-general Bruno Linyiru said the levy does not apply in the EAC.

“It is a levy on imports under the Food Authority Act, which was suspended during the Covid-19 pandemic period,” he said. “When it was gazetted, it was meant for the wider regions. But it is not applicable within the EAC. In the Common Market, we don’t have imports or exports, but transfers.”