SACU completes EAC bilateral tariff negotiations

By Business Reporter

THE Ministers of the Southern African Customs Union (SACU) and the East African Community (EAC) have successfully concluded bilateral tariff negotiations under the Tripartite Free Trade Agreement (TFTA).

The TFTA consists of three regional economic communities, being the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Community (SADC). The TFTA, which was launched on 10th June 2015, aims to establish a single market for 27 African countries with a combined population of about 700 million people (57% of Africa’s population), and Gross Domestic Product above USD 1.4 trillion.

As part of the market integration pillar of the TFTA, Member/Partner States were to undertake bilateral tariff negotiations with Member/Partner States with whom they currently do not have preferential tariff arrangements.

SACU has therefore been conducting tariff negotiations with the EAC, which consists of Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda.

With a market of around 145 million people and a combined GDP of around US$ 146 billion, tariff preferences into the EAC, once concluded, will enhance opportunities for businesses within SACU, either as an export destination or as a source of inputs.

“The conclusion of the SACU-EAC negotiations marks a significant step towards realising the benefits of the TFTA. The main aim of the SACU-EAC market access negotiations has always been to provide commercially meaningful market access for the private sector in the two regions.

“The SACU-EAC private sector will thus have access to new and dynamic markets for exports as well as new sources of inputs for domestic production processes, thereby enhancing intra-regional trade. Furthermore, there is emphasis on the development of regional value chains in a wide range of sectors, to deepen integration between SACU and the EAC.

“The conclusion of the negotiations provides an opportunity for the TFTA to be a building block and to have a coordinated approach for negotiations in the African Continental Free Trade Area (AfCFTA),” said the EAC secretariat last week.

At the beginning of the negotiations the SACU and EAC Ministers noted the substantial progress achieved and agreed on a number of principles to guide the conclusion of the negotiations. The Ministers agreed that the agreement should result in new market access with commercial value for both Parties. Therefore, the negotiations payed particular focus to critical products of export interest to SACU and the EAC. The Ministers emphasised the need to promote the development of regional value chains through the tariff preferences. The Ministers further agreed on a roadmap.

SACUconsists of Botswana, Eswatini, Lesotho, Namibia and South Africa, and the East African Community (EAC), consists of Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda.