Nakaweesi, Dorothy; Daily Monitor (Kampala) 2008-09-03
Burundi, Rwanda, Tanzania and Uganda, considered poorer economies than Kenya, will have some protection from trade imbalances after a spirited appeal was made while the region prepares for the free movement of goods, services and labour which will come in 2010.
The decision was made to ensure that all East African Community (EAC) member countries receive equitable treatment in trade matters and to encourage the development of domestic industrial capacities which is expected to form a greater economic force against non-members in the future.
This follows the decision by the EAC Secretariat last week to include clauses in the protocol that will protect private businesses in those countries once the Common Market is launched in 2010. It was decided at a meeting in Nairobi in preparation for the region’s entry into a Common Market, the second stage of the integration process after the Customs Union.
The decision also follows alleged threats by private sector players in Tanzania and Uganda to withdraw from the negotiations unless the possibility of a compensatory fund to protect them was considered.
“Uganda, Tanzania, Rwanda and Burundi are classified as least developing countries [LDCs] unlike Kenya, which has more industries. What we want is protection of the poorer economies”, said PSFU representative Mr John Ssempebwa after the meeting last week.
The need for balanced trade among member states prior to the Common Market is a precondition to protect against business closures, job losses, and labour flight such as that which led to the collapse of the EAC in 1977.
At the time, Uganda imported more from Kenya than vice versa, and the situation has not changed much since then. All members will contribute to a fund which will be created, from which money will be used for compensation should a poorer country suffer a trade imbalance during the Common Market.
It was also agreed at the talks to defer discussions on the liberalisation of education in the region. Uganda is considered the hub of education service in the region, where half of the country’s students are said to come from the region’s market. Uganda’s education industry could suffer a loss of its competitive advantage once liberalised.
A period of 10 years will be allocated for the growth of local construction and the re-insurance industries before persons and firms from Kenya will be allowed to enter other EAC partners.