EAC private sector pushes for 35pc common external tariff

Thursday, February 24th, 2022 02:35 | By

East African Community (EAC) member states have been urged to adopt a 35 per cent Common External Tariff (CET) to spur intra regional trade by $18.9 million (Sh2.2 billion).

East African Business Council (EABC) chief executive officer John Kalisa (pictured) said the move will create more jobs opportunities and increase industrial output.

Common External Tariff is a uniform tariff rate adopted by a customs union or common market to imports from countries outside the union. It is considered a protectionist tariff meant to boost competitiveness manufactured products.

“EABC urges the EAC partner states to adopt a 35 per cent maximum CET tariff rate in a bid to promote industrialisation and strengthen the regional value chain,” said Kalisa in a statement. Raising the maximum CET to 35 per cent for set products, EABC said, will divert trade from global trading partners in favour of the EAC intra-regional trade.

Trade creation

In this move, Uganda is set to accrue the highest trade creation at $8.5 million (Sh967 million) followed by Kenya and Rwanda at $5,099,829 (Sh580 million) and $3.71 million (Sh421 million) respectively.

A statement from EABC said that adopting the 30 per cent CET will generate employment marginally by 0.02 per cent which is equivalent to 5,055 people or 6,089 people if a maximum rate of 33 per cent was applied. Industrial production , EABC said would increase by 0.04 per cent to $12.1 million (Sh1.3 billion) in output with the highest rate at 35 per cent.

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