East African Community Agrees Common Market Protocol

by Lorys Charalambous, Tax-News.com, Cyprus

07 October 2009

Representatives of the five member states of the East African Community (EAC) have signed the Common Market Protocol, which will facilitate the free movement of goods, labour and services from July 2010.

The member states of the EAC are Burundi, Kenya, Rwanda, Tanzania and Uganda. The treaty for its establishment between Kenya, Tanzania and Uganda was signed in November 1999, with Burundi and Rwanda both joining in 2007.

As part of the developing co-operation between the countries, EAC established a Customs Union in 2005. That involved the implementation of tariff reductions whereby Kenya applies 90%, and Tanzania and Uganda 80% tariff reductions on traded products, while there was the removal of all non-tariff barriers on cross border trade.

The terms of the Common Market Protocol, it was reported, had taken 18 months of negotiation, with part of the final of the discussion being involved with permanent residence, which will now be based on national laws; the right of establishment of a company from one member state into another; and the free movement of people and workers.

EAC countries are working towards the next stage in the integration process through the establishment of a Monetary Union by 2012. The Secretary General of EAC, Juma Mwapachu, said at a later conference that: “EAC is now well recognized by the World Trade Organization, the European Union, etc. EAC has become a major attraction for foreign investments with its close to 140 million consumers. It is on the verge of being the only regional community to develop a block market. Serious efforts are being made at national and regional levels to address any challenges.”

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