WTO TRADE FACILITATION SYMPOSIUM BETTER BORDER MANAGEMENT East

WTO TRADE FACILITATION SYMPOSIUM: BETTER BORDER MANAGEMENT: East African Community (EAC) Presented by: Mr. Dickson Poloji, Policy Analyst , EABC 13 -15 th November 2012

Presentation Outline About East African Business Council (EABC). Introduction. Trade Facilitation-EAC Border management. Importance of better border management Proposed trade facilitation program for EAC Countries. Other trade facilitation measures.

About East African Business Council (EABC) q EABC: is an apex body of the Private sector in the East African Community (EAC) Partner States. Established in 1997 with support from EAC to ensure that the EAC policies are Private Sector friendly. q The mission: is to represent and promote the interests of the EAC Business Community; provide value added services that create new business opportunities, enhance global competitiveness of EAC businesses and actively influence government policies to improve the enabling business environment. q Relationship with EAC: - “Observer Status” in all relevant activities and institutions of the EAC. Currently seeking a more binding framework of engagement with the EAC secretariat.

INTRODUCTION From Customs Union to Common EAC Market EAC Customs Union • • • Entry point to the integration process. Customs Union Protocol implemented from 2005. Transition period was 5 years From 1 st January 2005 to 31 st December 2009 Now EAC is consolidating and making it functional. • Implemented from 1 st July 2010 • This is the second stage of EAC Integration process • EAC making it more functional. EAC Common Market

INTRODUCTION Customs Union + Single Customs Territory q Although EAC is at Common market stage , It is still consolidating the stage of Customs Union and trying to make it functional through formation of Single Customs Territory. q Under the Single Customs Territory, EAC is discussing two pillars: Customs management and Free circulation of goods. q Under these two pillars, EAC is reviewing how to facilitate the flow of good through internal and external borders.

Trade Facilitation - EAC Border Management q Trade facilitation at border points is still a major issue. It is affecting the clearance of goods. q Border clearance processes are amongst the most problematic links in the supply chain and frequently undermine competitiveness by increasing the cost and reducing reliability of supply. q The time schedules at the border posts are not synchronized. q Border controls interfere with free circulation of goods.

Trade Facilitation - EAC Border Management q Some NTBs occurs at the Borders. q Numerous non customs state agencies involved in clearance of goods “The speed of the swam of locusts is determined by the slowest locust. ” q Necessary infrastructure and standards for border management may be lacking. e. g power q Understanding of the new customs procedures. Flow of information on the customs procedures and requirements. q Lengthy and varying customs procedures. q Delay in clearance of goods

Importance of better border management q Facilitates smooth and faster flow of cargo across the borders. q Promotes intra-EAC trade. q Enhances free circulation of goods. q Reduces cases of NTBs. q Improve predictability and reliability of shipments. q Reduces transaction costs at the borders

EAC Trade flow, 2007 -2010 (US$ Million) Table 8 % of Intra-EAC Trade to the Total Trade (Source: EAC Facts and Figures 2011) Country 2007 2008 2009 2010 Intra. Exports 1, 680. 3 2, 180. 8 2, 210. 1 2, 355. 7 Intra. Imports 1, 148. 9 1, 484. 3 1, 655. 4 1, 764. 6 Total intra. EAC Trade 2, 829. 2 3, 665. 1 3, 865. 5 4, 120. 3 26, 886. 56 34, 469. 75 31, 806. 62 37, 100. 48 Total EAC Trade (EAC + rest of world) % of Intra. EAC Trade to Total Trade 10. 5% 9 10. 6% KAM 1959 -2009: 50 Years of Excellence. 12. 2%Manufacturing 11. 1%

Total Intra-EAC Trade 2010 10 KAM 1959 -2009: 50 Years of Manufacturing Excellence.

Proposed Trade Facilitation program for EAC countries Definition of the Concept - One Stop Border Post (OSBP) q An integrated border system under the OSBP model aims to bring together all the border agencies for improved efficiencies through streamlined, coordinated and harmonised operations. q The legal framework to support OSBP is still being finalised. q A Bill for OSBP is still going through approval process.

Proposed Trade Facilitation program for EAC countries Benefits of One Stop Border Post (OSBP) q To reduce transit times for traders and transporters leading to more effective use of available resources and assets at a lower cost. q To improve competitiveness for goods in the region due to reduced processing times at the border which are assumed to translate into reduced costs. q To enhance the reliability of the supply chain through streamlined and harmonised procedures resulting in predictable movements of cargo. q To develop better operational controls through shared and improved exchange of information among agencies.

Proposed Trade Facilitation program for EAC countries One Stop Border Post for Internal Borders q Partner States are expected in future to establish and implement one stop border post at the common borders and may enter into such bilateral agreement as may be necessary. q There is bilateral Agreement between United Republic of Tanzania and Republic of Rwanda to establish and implement one stop border post at Rusumo. q There are other proposed One Stop Border Posts e. g. Malaba Border, Namanga, Holili/Taveta.

Proposed Trade Facilitation program for EAC countries One Stop Centre for External Borders q This option proposes the promotion of the One Stop Centre concept at the main sea ports into the region such as Mombasa and Dar es Salaam Ports. q Under this set up, each Partner State would have direct responsibility for clearing goods destined for its country and for ensuring that revenues are remitted to the destination states. q To start with the main sea ports at Mombasa and Dar es Salaam as phase one and thereafter the main land borders into the EAC as phase two as transitional phases where each Partner State would place its own officers at the major points of entry.

Proposed Trade Facilitation program for EAC countries Private sector view on One Stop Border Post q One Stop Border Post is a good concept for EAC especially for internal borders. q However, the measure should be transitional i. e. for period of time. q Ultimately, one stop border post should be phased out for Internal borders. i. e. should be shifted to the outer/external borders of EAC Partner States. q This will facilitate free movement of goods in a single Customs Territory.

Other Trade Facilitation measures q Promotion the use of Authorised Economic Operators scheme complemented with post clearance audit. It requires all in the chain to participate in the scheme for full benefits. It is a challenge. q Mutual recognition of Authorized Economic Operators (AEO) scheme. q Single window system for agencies working at the border. q Publication of the procedures to improve their predictability. Not in routine orders only. q Simplification and harmonization of all procedures. q Automation and use of ICT for all agencies at the border.

Other Trade Facilitation measures q Ministries have established a national desk for timely dissemination of information about EAC trade-facilitation matters under EAC Ministries. q Risk-based management approach. q Coordinated approach to Trade facilitation at the borders. q Building of border related infrastructure. q Proposal to have COMESA-SADC –EAC Free Trade Area (Tripartite) q Harmonization of Regulatory framework in the EAC. q Harmonization of axle load limits for the EAC region.

Thank you, Asante.