Business & Economy

Kenya, Tanzania agree to end trade dispute

KENYA and its southern neighbour Tanzania have agreed to end their trade dispute, paving the way for increase in intra-East Africa Community (EAC) trade.

The two largest economies with the EAC Common Market have had a bumpy trade relation in the last few years, culminating in a significant drop of Kenya’s exports to Tanzania by 60 percent in the first six months of 2017, according to data published by Kenya National Bureau of Statistics (KNBS).

‘We have agreed to resolve the none-tariff barriers,” Chris Kiptoo, the Principal Secretary in the Ministry of Trade for Kenya and Elisante Ole Gabriel, the Permanent Secretary in the Ministry of Trade for Tanzania said in a joint communique released in Nairobi early February.

The two officials led trade and agriculture delegations to negotiations on self-imposed trade restrictions by the two counties. The meeting was held in Kenya’s coastal city of Mombasa.

‘The two Partner States recognized each other as a significant trading partners and underscored the importance of ease of market access for each other’s products and services,’ noted the joint communique.

Trade between Kenya and Tanzania constitutes over 45 percent of the entire trade within the EAC, data from the Kenya Economic Survey 2017 shows.

Their combined gross domestic product account for 76 percent of the region’s economy, an indication that they are the economic backbone of the common market.

Key issues discussed during the meeting ranged from how to resolve multiple charges on levies, lack of preferential treatment, delays at border points, need for standardized inspection fees, non-payment of suppliers by Uchumi and Nakumatt supermarkets which are facing financial trouble, slow customs procedures and slow implementation of the relevant East African Community directives.

‘In this regard, the two Partner States called for effective and timely implementation of agreements made during bilateral meetings with a view to ease the flow of goods and services,’ noted the communique.

Private sector representatives from the two countries made presentations highlighting trade and investment opportunities in aviation, mining, petroleum and transportation among others, which the two countries agreed to pursue as soon as the current trade barriers are resolved.

Other key issues agreed by the two countries include that the EAC Secretariat should come up with a regional policy to address challenges facing the retail sector to have a joint code of practice and regulations; that the chiefs of immigration services from the two countries to convene a meeting to resolve immigration issues and that Tanzania should undertake verification exercises on lubricants, edible oils, and cement in Kenya by March 31.

Tanzania agreed to expedite ratification process and implement EAC Sanitary and Phytosanitary Protocol, which requires EAC partner states to establish regulatory institutions while Kenya was required to establish Food and Drugs Authority.

The meeting also called for the EAC Secretariat to speed up the development of EAC Regional Cargo Tracking System and its adoption by all EAC partner States.

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