Sunday, March 1, 2009

Kenyan Seminar on COMESA CET Schedule Analysis

The launch of COMESA Customs Union which was postponed last year is likely to be held 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. By the time, the KAM secretariat had identified a total of 1,078 tariff lines with duty rate divergences between the proposed COMESA CET rates and the EAC rates which were against Kenya’s manufacturing sector.

Since that time, additional meetings on sensitive lists and tariff alignment schedules including Trade and Customs and Inter-Governmental Committees meetings have been held in Lusaka, Zambia in September where the Kenyan team pushed for a convergence of a number of tariff lines with the EAC CET. For some we succeeded while for others we did not get convergence with the 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 indicates that there are at least 1,016 tariff lines of at 6-digit level with divergences between COMESA and EAC CET, accounting for about 20% of the total tariff lines at 6-digit HS level. At the same time, a total of 3,881 six-digit COMESA tariff lines have attained convergence with EAC CET, accounting for about 77% convergence.

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 under Chapter 27 and 87. 

Comparative analysis of areas of divergence between EAC and COMESA CET at 8-digit level was not possible due to cases of many tariff lines (597) in the 8-digit schedule with same HS codes but different product descriptions, about 361 tariff lines where there was no description at all, and another 533 tariff lines where there were 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.

Key sectors affected by tariff rates divergences between COMESA and EAC CET rates at 6-digit level include food and beverages with 118 tariff lines, mineral products with 48 tariff lines, plastics and rubber sector with 38 tariff lines, wood and articles of wood with 50 tariff lines, textile and clothing with 383 tariff lines, chemical and allied with 31 tariff lines, building and construction materials with 59 tariff lines, metal and allied sector with 98 tariff lines, and motor vehicle sector with 3 tariff lines. For 8-digit level divergence, the 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 8.30 am to 1.30 pm at the Laico Regency Hotel. The detailed programme will be circulated before mid next week.

The objective of the seminar is to advise the Ministry of Trade so as to classify products that are not aligned to the EAC CET - whether at 6 or at 8 digit level - on Kenya’s national list of sensitize products.

To Register Contact: Ms. Bella Akinyi on Email: bella.akinyi@kam.co.ke, Tel: 3746005/7, 3746021/22.