Monday, February 23, 2009

KAM, Ministry of Trade to co-host seminar on COMESA CET

The launching of COMESA Customs Union which was postponed last year is likely to be launched any time this year once the Heads of State Summit is convened.

KAM held its first consultative seminar on the analysis of COMESA Common External Tariff schedule on 6th October 2008 and demonstrated the tariff lines that had divergences with the EAC CET. During the October 2008 seminar, KAM secretariat had identified a total of 1078 tariff lines rates divergences between the proposed COMESA CET rates and the EAC rates which were against Kenya’s manufacturing sector. 

Since that time, additional meetings of sensitive lists and tariff alignment schedules including Trade and Customs and Inter-Governmental Committees meetings were held in Lusaka - Zambia in September and October 2008 where Kenya team pushed for a number of tariff lines to be converged with the EAC CET, some of which we succeeded while others we did not get convergence with EAC CET due to diverse economic interests among many COMESA Member countries.

To date, our analysis of the latest COMESA CET schedule that was circulated to COMESA member States in January 2009 indicate that the tariff lines at six digit level where there are divergences between COMESA and EAC CET are 1,016, accounting for about 20 per cent of the total tariff lines at six digit HS level. At the same time those tariff lines at six digits which are the same as in EAC CET are about 3,881(about 77 per cent convergence with EAC CET).

Both analyses done by KAM and the Ministry of Trade experts have identified the short comings of the current proposed COMESA CET schedule that was recently circulated to COMESA member States. Such anomalies include tariff duty range in COMESA CET rather than specific duty rate in each tariff line; tariff lines which have splits in EAC CET and are not in COMESA CET, tariff lines with the same HS code but different product description, repetition of HS codes and many tariff lines without rates such as products of Chapter 27 and 87. 

Comparative analysis of areas of divergence between EAC and COMESA CET at eight digit level was not possible due to cases of many tariff lines (597) in the eight digit schedule with same HS codes but different product descriptions and about 361 tariff lines where there is no description at all and another 533 tariff lines where there are no COMESA tariff rates. KAM had recommended at the negotiation meetings that all tariff lines not aligned to the EAC CET should be put in the sensitive list in order to ensure harmony with the EAC CET.

The key sectors affected by tariff rates divergences between COMESA and EAC CET rates at six digit level are; food and beverages where there are 118 tariff lines with divergences; mineral products - with 48 tariff lines with divergences, plastics and rubber sector -38 tariff lines with rates divergences, wood and articles of wood- 50 tariff lines with rates divergences, textile and clothing - 383 tariff lines with rates divergences, chemical and allied - 31 tariff lines, building and construction materials - 59 tariff lines with rates divergences, metal and Allied sector 98 tariff lines, - motor vehicle three tariff lines. At an eight digit level, COMESA Secretariat is yet to put duty rates for many tariff lines. 

In order to sensitize KAM members and sectors on the latest COMESA CET schedule analysis and on the progress of COMESA Customs Union, KAM in liaison with the Ministry of Trade will hold a consultative seminar on Thursday, 26th February, 2009 from 9.00 am to 4.30 pm at the Laico Regency Hotel. The detailed programme will be circulated before mid of next week.

Our main objective of the seminar is to advise the Ministry of trade to put all those products whether at six or at eight digit level which are not aligned to the EAC CET in Kenya’s national list of sensitise products.