Global Politics Online
Wambi Michael
KAMPALA, Sep 29 (IPS) - The plans for a common market in the East African Community (EAC) are proceeding apace and should fall in place on Jan 1, 2010, the target date of implementation. But Uganda’s traders are concerned that they will be unable to compete with traders from their country’s larger neighbour Kenya when the new common market starts.
The EAC common market will be aimed at deepening and widening regional integration by allowing free movement of labour and capital and granting citizens the right to establish business across borders in Kenya, Uganda, Tanzania, Rwanda and Burundi.
Uganda’s private sector is worried that the EAC objective of regional integration on a win-win basis may not be achieved.
Gabriel Hatega, executive director of Uganda’s Private Sector Foundation, points to Uganda’s growing trade deficit as the customs union is set up and tariffs phased down on Kenyan goods exported to Uganda.
”This means that the cost of doing business in Uganda is so high that reducing tariffs from 10 to zero percent is much less than what would be the effective rate of protection.
”We in the private sector have noted with concern the relocation of value-adding elements of some industries to Kenya, only leaving the sale and distribution part of the value chain in Uganda,” he adds.
In the transition period, the EAC customs union recognised different levels of development and competitive ability. The transition period was aimed at helping the unequal partners in the EAC to improve their levels of competitiveness before the full customs union kicked off.
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All rights reserved, IPS – Inter Press Service, 2009.