Protectionism & non-tariff barriers impeding intra-East Africa trade

Intra-East African Community (EAC) trade is on the path to recovery and growth despite facing challenges from protectionism and non-tariff barriers, according to recent data shared by John Bosco Kalisa, the CEO of the East Africa Business Council. Kalisa highlighted that the EAC region has shown resilience in the face of adversities like the COVID-19 pandemic, climate change, and the Russia-Ukraine conflict. The latest figures indicate a positive trend in GDP growth, with an average of around 5.1% across EAC partner states, signaling an improvement from previous years. In terms of intra-regional trade, the numbers are also encouraging, with a growth rate of approximately 24%, up from 19% in the previous year. Kalisa attributes this growth to various factors, including economic diversification, the recovery of the service sector (especially tourism and travel-related services), and significant investments in productive sectors such as infrastructure and technology. He noted that investments in road networks, digital technology, healthcare facilities, and other key areas have contributed to boosting trade within the region. Moreover, the commitment of partner states to deepen integration efforts has played a crucial role in addressing emerging challenges like protectionism and reducing non-tariff barriers (NTBs). The issue of protectionism and preferential tax treatment within the EAC member states has been a point of contention affecting intra-regional trade. Kalisa highlighted that some countries have been seeking tax benefits for specific industries, leading to distortions in trade and hindering the free movement of goods and services. He emphasized the importance of harmonizing tax regimes and regulations across the EAC to create a level playing field for businesses and facilitate seamless trade. Despite the progress made in alleviating NTBs and promoting integration, challenges persist within the EAC trade landscape. Unilateral decisions by some partner states that contradict the principles of the Customs Union and Common Market have resulted in disruptions to trade flows. Kalisa urged for a greater commitment to the treaties and protocols agreed upon within the EAC to ensure that products and services can move freely across borders without unnecessary restrictions. As EAC member states work towards addressing these challenges and facilitating smoother trade relations, the future outlook for intra-regional trade appears promising. The recent initiatives to combat protectionism and reduce NTBs signal a positive shift towards a more interconnected and vibrant regional economy. However, continued efforts and cooperation will be essential to sustain this momentum and unlock the full potential of EAC trade.