Non-Tariff Barriers (NTBs)
NTBs are defined as quantitative restrictions and specific limitations that act as obstacles to trade, and which appear in the form of rules, regulations and laws that have a negative impact to trade.
An EAC NTB inventory was compiled in 2005/06 and validated in 2007. It categorises NTBs experienced on intra-EAC trade under the following:
• Customs and Administrative documentation procedures
Which include varying systems for imports declaration and payment of applicable duty rates; limited customs working hours; varying interpretations of the Rules of Origin; application of discriminatory taxes and other charges on EAC originating imports; cumbersome procedures for verifying containerized imports; unfair competition from counterfeit products, and diversion of transit goods into the region.
• Immigration procedures
Which include varying application of visa fees and work permits; cumbersome and duplicated immigration procedures, and lack of an East African Passport by many citizens who cross borders in search of business opportunities.
• Cumbersome inspection requirements
Which include procedures on Gross Vehicle Mass and axle load regulations, costly quality inspection procedures, cases of lack of recognition of inspection certificates issued by accredited laboratories, cases of lack of mutual recognition of quality certification marks and test certificates issued by EAC Standardization Bureaus, varying quality inspection and testing procedures which are also introduced without prior discussions and consensus and varying procedures for issuance of export certification marks.
• Police road blocks
Which involve police officers stopping commercial vehicles at various inter-country road blocks and at border crossings even where there is no sufficient proof that goods being transported are of suspicious nature.
• Varying trade regulations among the three EAC countries
The most notable one was different axle loads and different specified maximum Gross Vehicle Mass (GVM) for commercial vehicles. Also EAC countries have varying parameters on weights, labelling, and quality, tolerance in measurements, and technologies used in packaging, which limits ability of goods to cross borders.
• Varying, cumbersome and costly transiting procedures in the EAC countries
Which include varying requirements on commercial trucks used in transit traffic, bottlenecks in offloading imports at the Port of Mombasa and Dar es Salaam Port, unrealistic grace period on imports before application of demurrage charges, and application of insurance bonds even on goods traded within the region
• Duplicated functions of agencies involved in verifying quality, quantity and dutiable value of imports and exports
Which include numerous agencies involved in import and export inspection, and in certifying compliance to procedures; resulting to duplication of effort and wasted business-time. Also, many inspection bodies have not established laboratories at major entry and exit points.
• Business registration and licensing
which includes Varying business registration procedures and lack of preferential treatment to EAC originating businesses versus foreign originating businesses, which makes cross-border registration of business a difficult process, cumbersome and expensive manual processes used in business names search, registration and payment of relevant charges, multiplicity of licenses used in production, and distribution and sale of goods, resulting to duplication and inhibitive cost of doing business in the region.
NTBs impact unfavourably on business, increasing the cost doing business through official and unofficial payments to clear goods at the borders; general expenses incurred by businesses at border points; lost business opportunities; value and quantity of wasted products during inspection and cost of time lost in understanding and complying with un-transparent and cumbersome procedures. This has a direct bearing on the region’s competitiveness.
EABC ACTIVITIES IN ELIMINATION OF NTBs
In order to leverage lobbying for NTB elimination, EABC launched the Annual Business Climate Index in 2004. The BCI looks at progress in elimination of NTBs under the categories above and improvement in other business climate factors that have an effect on business such as access to finance; access to land and the legal and regulatory framework among others.
The launch event triggered a Public/Private Sector dialogue on NTB in which EABC involved the then three trade ministers, media and public sector in the EAC Partner States. In the aftermath of the BCI launch, the EAC Secretariat requested EABC to assist in the creation of a NTB Monitoring Mechanism (NTBMM). In 2005 a short-term consultancy under finance of GTZ/ICON was undertaken to design the NTB Monitoring Mechanism.
Elements of the NTBMM:
• Member States agreed to a list of core NTBs. Responsibility was attributed to Line Ministries for the elimination of NTBs (National Monitoring Plans)
• Company complaints should be aggregated at the national level and brought to the regional level Line Ministries are in charge of NTBs elimination
• National/Regional Monitoring Committee plus Business Associations including EABC to act as watch dogs
• Progress is checked through Annual Business Climate Survey to be undertaken by EABC
While the NTB National Monitoring Committees have been established in each of the 5 Partner States to coordinate the monitoring and removal of NTBs, the Committees have not been effective due to lack of technical capacity to facilitate reporting and removal of NTBs.
Among the activities planned for 2009, EABC intends to train the private sector on the reporting mechanism and also to work with the EAC in buildingthe technical capacity of NMCs by ensuring they have appropriate regional and national secretariats to aid in the reporting and elimination.