LITERATURE REVIEW: TRADE FACILITATION AS AN IMPERATIVE FOR THE EAC CUSTOMS UNION
The global economy has made considerable progress in the last two decades in easing border restrictions on merchandise trade, by addressing trade-protective measures of non-tariff barriers and high tariffs, through the implementation of structural reform programmes as well as commitments undertaken under the multilateral framework of the GATT/WTO. With the passage of such ‘first generation’ trade policy reforms, attention has focused increasingly on other direct and indirect impacts of domestic regulatory regimes on international trade, the so-called ‘second generation’ trade issues concerned with behind-border measures that fall under the heading of trade facilitation. Broadly defined, these measures include anything from institutional and regulatory reform to customs and port efficiency and are inherently far more complex and costly to implement.
This paper makes an objective evaluation on the contribution of Customs to trade facilitation within the East African Community (EAC) by reviewing literature on the subject from various sources. The paper is developed against the background of trade facilitation as understood by the World Trade Organization (WTO). The paper therefore examines how and to what extent the trade facilitation-related aspects of the WTO are (or are not) reflected in the EAC customs law and administration. The World Customs Organization’s Trade facilitation instruments, particularly the Revised Kyoto Convention, are also considered. After examining the EAC customs law and administration, suggestions are made for better coordination, harmonisation and simplification of international trade/customs procedures within the East African Community.
Further examination of literature on the subject of the effects and impacts of trade facilitation on its current operative form and on reform provides scope for evaluation of the economic effects and development outputs of the current EAC Customs Union trade facilitation measures in place and practical suggestions on how it can be further refined and reformed for optimal outputs to enhance national and regional economic development objectives and priorities.
According to the EAC Treaty - 1999, Article 74, one of the major pillars upon which the East African Community (EAC) was founded is cooperation in matters of trade liberalization and development. Article 5 on Page 15 of the same EAC Treaty - 1999, goes further to state that the EAC Partner States at that time agreed in principle ‘to establish among themselves…a Customs Union, a Common Market, subsequently a Monetary Union and ultimately, a Political Federation’. The East African Community Customs Union (EACCU) commenced its operations within Kenya, Tanzania and Uganda on 1 January 2005 with Burundi and Rwanda acceding to the EAC in July 2007. The East African Common Market Protocol encompassing all the five Partner States was eventually ratified in July 2010.
In compatibility with the definition of Customs in Chapter 2 of the General Annex to the Revised Kyoto Convention the EAC, as in many other countries, Customs is on the forefront of the various agencies that intervene in international trade in goods. Customs is, for instance, deeply involved in controlling goods which cross borders, determining goods’ nomenclature and origin, and collecting revenue as well as administering trade policies. Hence, the manner in which Customs operates highly affects international trade either negatively or positively. In other words, the manner in which Customs operates can either complicate or simplify the international trade in goods. And this introduces us to the concept of trade facilitation.
There are a number of definitions of trade facilitation used by different authors and different organisations. The United Nations Economic Commission for Europe (UN/ECE), for instance, defines it as a...
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