EAC Common Market -with a special focus on Food Security Provisions

Presentation by Timothy Wesonga-EAC Secretariat

6th Sept 2010Kampala , Uganda

1

Content

I. Introduction

II. EAC integration process

III. The EAC Customs Union

IV. The EAC Common Market

V. Food Security Provisions/EAC Action Plan

VI. Benefits

VII.Conclusion

INTRODUCTION• The East African Community is an Inter-

governmental Organisation composed of the Republics of Burundi, Kenya, Rwanda, Uganda and the United Republic of Tanzania.

• The Treaty establishing the EAC outlines the objectives, fundamental principles and areas of cooperation for the Partner States.

4

EAC STAGES OF ECONOMIC INTEGRATION

• As per Article 5 (2) of the Treaty, Partner States undertook to establish among themselves a:

CUSTOMS UNION

COMMON MARKET

MONETARY UNION

POLITICAL FEDERATION

5

Our Journey… Art. 5

Customs Union

2005

Common Market

2010

Monetary Union

2012

Political Federation

?

The Customs UnionWhat is a Customs Union?

A legally binding voluntary commitment of

cooperation/integration by neighboring

countries to

Dismantle trade barriers amongst themselves

Adopt harmonized intra –trade regimes and;

Apply common trade regime to non members

Involves far reaching readjustments at regional and national level including policy reforms, economic, legal and institutional framework.

7

I. Scope of the EAC Customs UnionEAC TARIFF REGIME

Internal Tariff Elimination

Common External Tariff (CET)

Sensitive List

EAC Rules of Origin

10/11/2010 8

EAC COMMON MARKET

State of Play

• EAC Common Market Protocol signed by the Summit in December 2009 after 17 months of High level negotiations;

• Parliaments of all 5 Partner States ratified the protocol in April 2010;

• Implementation began from 1st July 2010;

• EAC undergoing an institutional review process to enable it to effectively implement the protocol

Historic Signing of the CMP

11

Common Market

What is a Common Market ?

A legal and binding commitment to a deeper and Stronger functional integration by member Countries to-:

Remove all trade barriers on goods and services;

Liberalize the movement of the factors of production amongst themselves;

12

Overview of EAC CM • Additional integration of the factor market on top

of the product market integration

• The core elements(features) of the EAC common market are the four freedoms: Free trade in goods Free trade in services Freedom of movement of capital Freedom of movement of labour and the right of

Establishment and Residence

• The Common Market will supplements the workings of the Customs Union;

Features of a Common Market

Further macro-economic policy Convergence

Fiscal Policy;

Monetary policy,

Other development areas of Cooperation.

14

Areas of Cooperation-CM

• Protection of cross border investment• Economic and Monetary Coordination• Financial sector policy coordination• Harmonization of Tax policies and Laws • Prohibited business practices• Prohibited subsidies• Public procurement• Coordination of Trade relations • Coordination of Transport Policies

15

Areas of Cooperation Cont’d

• Harmonisation of Social Policies

• Environmental Management

• Cooperation in Statistics

• Research & Technological Development

• Cooperation in Intellectual Property Rights

• Cooperation in Industrial Development

• Cooperation in Agriculture & Food Security etc

16

Cooperation in Agriculture and Food Securityin the CU

The Partner States will undertake to;

a) Sustainably develop and promote agriculture with regard to crops, livestock, fish, forestry and their products; and

a) Ensure food security in the community through access to quality and sufficient

SMALL SCALE IMPORTERS GOODS VERIFIED ON OPEN YARD – ISEBANIA (KENYA)

VERIFICATION IN PROGRESS AT SIRARI (TANZANIA)

PRIORITY AREAS FOR THE EAC FOOD SECURITY ACTION PLAN

1. Provision of Enabling Policy, Legal and Institutional • To create a harmonized approach for enhancement of food security in

the East African region.

2. Increase Food Availability in Sufficient Quantity and Quality• To increase agricultural (crops, Livestock and Fisheries) productivity and

make East Africa Region a net exporter of food.• Ensure that food is effectively moved from areas of surplus to areas of

deficit within the East Africa region. • To deliberately improve exploitation of alternative sources of food

supply from crop, livestock, marine and fisheries, and forestry systems.

3. Improve Access to Food• Improve Physical Access to Food.• Put in place structured trading system for food commodities and

products.• To improve food purchasing power of Individuals, households and

communities.

Priority areas cont’ d4.Improve Stability of food supply and access in the EAC Region

To improve capacity for emergency preparedness and response.

5.Enhance the efficiency of food utilization, nutrition, and food safety To Improve on nutrition and food safety.

6.Implementation Strategy and MonitoringGuided by the Agriculture and Rural Development Strategy for the East African Community (2005 - 2030) and other EAC relevant documents.

7.Resource Mobilization and Time Frame Financial resource will be mobilized mainly from EAC Partner States and

Development Partners. The Plan will cover a period of 5 years from 2010 to 2015.

• As a cross cutting issue, all food security strategies and actions will have in-built gender and HIV/AIDS considerations.

Benefits of the CM

• Large single market -130 Million People

• Increased Trade volumes in Agricultural products between the EAC Partner States

• Competitiveness- Lower prices and enhance efficiency

• Monopolies – endangered

• Surveillance enhanced

• Food Surplus areas Vs food deficient areas(A business opportunity)

Common Market Annexes

The implementation of the EAC Common Market Protocol principle provisions is guided by the relevant Annexes which are integral parts of the Protocol.

23

Concluding Remarks The Common Market Protocol was officially signed

by the Heads of State on 20th November 2009. The common entered into force after ratification by

all EAC Partner States from 1st of July, 2010 The Common Market integration consolidates and

supplements the CU The Common Market is a Process- more benefits will

coming as implementation continues The free movement of goods and especially

Agricultural produce and food in particular is contributing towards the enhancing of food security in the region.

Trading in Agricultural products has been enhanced (Formal)

24

The EAC Common Market

• The East African Common Market (EACM) provides the best opportunity for building value chains, because it provides a framework for exploiting economies of scale in the production and supply of food.

Promotion of trade

• Mechanism of elimination of NTBs

• One Stop Border Initiative

• Tripartite Initiative –EAC-COMESA- SADC

THANK YOU

For additional information please contact:

Timothy WesongaSenior Livestock and Fisheries officer

Agriculture and Food Security Department East African Community, www.eac.int

Email: wesonga@eachq.orgTel: +255 27 2504253/8

One People, One Destiny

28