WORLD TRADE  
ORGANIZATION  WT/TPR/M/171 
20 December 2006 
 (06-6086) 
Trade Policy Review Body 
25 and 27 October 2006  
 
 
 
TRADE POLICY REVIEW 
 
EAST AFRICAN COMMUNITY 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mrs. Claudia Uribe (Colombia) 
 
   Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE RE PRESENTATIVE OF TANZANIA ON 
BEHALF OF THE EAC PARTNER STATES 4 
III. OPENING STATEMENT BY THE REPRESENTATIVE OF TANZANIA 5 
IV. OPENING STATEMENT BY THE REPRESENTATIVE OF KENYA 6 
V. OPENING STATEMENT BY THE REPRESENTATIVE OF UGANDA 7 VI. STATEMENT BY THE DISCUSSANT 8 VII. STATEMENTS BY MEMBERS 11 VIII. REPLIES BY THE REPRESENTATIVE OF KENYA ON BEHALF OF THE EAC 
PARTNER STATES AND ADDITIONAL COMMENTS 17 
IX. CONCLUDING REMARKS BY THE CHAIRPERSON 25 
 
   
 
    
 
    
 
Note:   Advance written questions by WTO Member s and the replies provided by the East African 
Community members are reproduced in document WT/TPR/M/171/Add.1 and will be 
available online at: http://www.wto.org/ english/tratop_e/tpr_e/tp_rep_e.htm.  
   WT/TPR/M/171 
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  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The first joint Trade Policy Review of the East African Community was held on 25 and 
27 October 2006.  The Chairperson H.E. Mrs. Claudi a Uribe (Colombia) welcomed the delegations of 
Tanzania, headed by Minister Basil P. Mramba ;  of Uganda, headed by Minister of State 
Mr. Ephraim Kamuntu;  and of Kenya, headed by Permanent Secretary Mr. David S.O. Nalo.  
Mr. Faizel Ismail (South Africa) had kindly agreed to act as the discussant for this Review.  As usual, 
the discussant would speak in his personal capacity  and not as a representative of his Government. 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures of the meeting.  The Reports by Ke nya, Tanzania, and Uganda were contained in 
document WT/TPR/G/171 and that of the Secretaria t in document WT/TPR/S/171.  As indicated in 
document WT/TPR/6/Rev.1, the Member under revi ew should provide written answers, by the 
beginning of the review meeting, to questions su bmitted at least two weeks before the meeting.  
Questions posed subsequently should be answered, to the extent possible, before the start of the 
second session of the meeting.  Questions left una nswered at the end of the second session should be 
answered in writing no later than one month after the meeting. 
3. Questions by the following delegations had been  submitted in writing at least two weeks in 
advance of the meeting and had been transmitted to the EAC delegations:  Singapore;  Canada;  
Hong Kong, China;  the European Communities;  and the United States.  Copies of these questions 
and of the answers provided by the EAC delegations were available in the meeting room.  Colombia;  
Australia;  Brazil;  Japan;  the Republic of Korea;   and Norway had submitted written questions after 
the two-week deadline.  These questions had also b een transmitted to the EAC delegations;  copies of 
these questions and of the answers provided by the EAC delegations were available in the meeting 
room.  Copies of all advance questions, as well as the responses received from the EAC delegations, are reproduced in WT/TPR/M/171/Add.1. 
4. The Chairperson noted that the three EAC me mbers had continued their economic reform 
programmes over the last few years.  Further liberalization of trade and investment, driven by their 
commitments in the WTO and participation in region al trade agreements, had been major features in 
this process.  The move from national tariffs to  the common external tariff had reduced average 
border protection in Kenya and Tanzania, and had somewhat increased it in Uganda.  Nevertheless, 
Kenya and Tanzania were applying other duties a nd charges although they had bound them at zero.  
Overall, taking into account these other duties and ch arges, the adoption of the common regime might 
turn out not to have liberalized trade in the three countries.  
5. EAC countries' membership in overlapping trade a rrangements also raised concerns as to their 
administrative cost, their impact on market access tr ansparency, and the risk of trade diversion.  
Therefore, the EAC's multilateral commitments on go ods and services needed to be improved in order 
to increase the predictability and credibility of its tr ade regime.  This would help the EAC countries to 
take up the challenges they were facing.  
6. The Chairperson informed Members that represen tatives of the EAC secretariat were present 
and, as had been the case for the OECS and WAEMU secretariats, she would offer the secretariat the 
floor, should it wish it.  She recalled that Uganda was member of the AITIC, which had asked to be 
allowed to observe the meeting.   
7. She informed Members that the draft of  the TPRB Annual Report (WT/TPR/W/36) was 
available in the room;  all Members' comments ha d been incorporated.  She intended to move the 
Report for adoption at the end of the second session of this Review. WT/TPR/M/171 
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  II. OPENING STATEMENT BY THE REPRESENTATIVE OF TANZANIA ON 
BEHALF OF THE EAC PARTNER STATES 
8. The representative of Tanzania, on behalf of the EAC partner states
, referred to their first joint 
TPR as a historic occasion.  He recalled how important the TPR was for Members as it assisted them to assess their trade liberalization performance at the multilateral level;  and showed how free trade 
optimized overall world welfare.  
9. The representative stated that, with the advent of globalization, small states had to regroup 
into blocs able to create big markets and investment  areas.  He noted that, against this background, 
efforts since 1917 had led to the signature of the Treaty for the Establishment of the East African 
Community in 1999, to the conclusion of the Protocol for the Establishment of the Customs Union in 
2004, and its entry into force on 1 January 2005. 
10. The EAC customs union was based on three main pillars – internal tariff elimination, the 
CET, and the elimination of non-tariff barriers – as well as on other important programmes, e.g. 
export promotion schemes, competition policy, and the standardization law.  The CET had three 
bands:  0% for raw materials a nd capital goods, 10% for intermedia te goods, and 25% for finished 
goods.  A few sensitive products attracted higher tari ffs to address development needs and concerns. 
11. The TPR was taking place at an opportune moment as the customs union was to celebrate its 
third birthday.  The members had adopted a progra mme of asymmetric internal tariff elimination:  
Tanzania and Uganda would apply import duties on  some product originating from Kenya for five 
years;  their reduction would be progressive eac h year, starting on 1 January 2006.  Products 
originating in Uganda and Tanzania  were exported to Kenya free of duty as were those originating in 
and traded between Uganda and Tanzania. 
12. The EAC partner states were also monitori ng non-tariff barriers and had established a 
mechanism for their elimination.  In addition,  the EAC had enacted the Competition Law and the 
Standardization, Quality Assurance, Metrology, a nd Testing Law;  and was harmonizing its sanitary 
and phytosanitary measures and trad e-related intellectual property right s.  Rules and regulations to 
implement the 2004 EAC Customs Union Manageme nt Act had also been developed.   
13. These efforts in trade liberalization had resulte d in increased trade and revenues;  the EAC 
partner states were benefiting from trade with one another.  The transposition of the national tariffs 
into the CET had reduced average tariff protection.  
14. The EAC was aware that countries could not be long to more than one customs union.  A 
provision in the EAC Customs Management Act sti pulated that the EAC partner states with dual 
membership in COMESA and SADC should wind up the preferences extended to these regional 
blocks by 31 December 2006;  negotiations with  the parties were under way to find an amicable 
solution.  Similarly, under the EC Economic Part nership Arrangement, the Council of Ministers was 
considering negotiations unde r different configurations. 
15. The economies of the EAC partner states face d various challenges, including level of 
competitiveness, fair play, and capacity to negotiate t echnical and financial assistance.  In this regard, 
they needed flexibility to ensure  that the multilateral trading system complemented their regional 
integration and national development processes. 
16. The EAC continued to consolidate its customs union.  It sought increased market access and 
assistance in addressing its supply-side constraints to ensure that it benefited fully from the 
multilateral trading system.  As it embarked on negotiations on a common market, it requested 
technical and financial assistance, particularly in trade in services and trade facilitation.  WT/TPR/M/171 
 Page 5 
 
 
  III. OPENING STATEMENT BY THE RE PRESENTATIVE OF TANZANIA 
17. The representative of Tanzania  said that Tanzania had progressed towards fulfilling its WTO 
obligations and had begun to bene fit from the rights thereof.  Tan zania was implementing a market-
based trade policy, adopted in 2003, that reflect ed the essence of the 1986 reforms transcending the 
social, political, and economic spheres.  At the ec onomic level, the reforms focused on re-introducing 
the market system based on the efficiency of the pr ice mechanism.  At the social level, they were 
aimed at transforming education and health.  At th e political level, they were aimed at entrenching 
democracy based on the broad-based participati on in decision-making, good governance, the 
observance of the rule of law, and the assurance of property rights.  In this regard, Tanzania had been 
undertaking legal and regulatory reforms that sought  to harmonize its national laws with WTO rules. 
18. Economic liberalization and dive rsification measures were bearing fruit.  GDP growth had 
increased to 6.7% in 2004.  For a long time, agri culture had been the backbone of the economy, but 
improved performance in non-traditional sectors (mini ng, tourism, and fisheries) was changing this 
structure.  Despite this emerging change, agricultu re had grown by 6% in 2004 and was expected to 
reach a growth rate of 10% over the next ten years.  The manufacturing sector had steady growth, at 
about 8% yearly. 
19. Tanzania was witnessing the adverse conse quences of a prolonged drought.  The resulting 
considerable food shortages had required s ubstantial imports, and over-dependence on hydro-
electricity had resulted in power rationing.  Howe ver, this was a temporary situation, and the 
Government was taking measures to  prevent future recurrence. 
20. With the view to addressing the supply-side c onstraints that impede d developing countries 
from benefiting fully from the multilateral trading syst em, Tanzania was determined to:  (i) build the 
institutional capacity to review, analyse, and impl ement trade-related policies supportive of private 
sector growth and development;  (ii) expand, transf orm, and modernize the infrastructures needed for 
private sector development;  and (iii) support th e private sector in incr easing its competitiveness 
through acquisition of skills, technology, and experience. 
21. The representative assured Members that Tan zania valued the work of the WTO bodies, 
including the TPRB.  He reaffirmed Tanzania's  commitment to the multilateral trading system.  
Tanzania strongly supported and we lcomed the Aid for Trade initiative.  While traditional aid was 
mostly directed towards addressing social problems, Aid for Trade would help LDCs to build their productive capacity and trade-related infrastructure, and to participate effectively in the multilateral 
trading system. WT/TPR/M/171 
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  IV. OPENING STATEMENT BY THE RE PRESENTATIVE OF KENYA  
22. The representative of Kenya
 stated that Kenya considered regional integration as 
complementary to the multilateral trading system.  Therefore, it was a vehicle to economic growth and prosperity.  Since 2000, Kenya had undertaken ma jor policy reforms aimed at improving governance 
and economic performance.  Its 2003 Economic Rec overy Strategy for Wealth and Employment 
Creation, which had taken into account the povert y reduction strategy (PRSP), was based on:  
(i) improving macroeconomic indicators and creati ng an enabling environment for production and 
investment;  (ii) strengthening the rule of law, transparency and accountability, and good governance 
through institutions and measures to manage public resources e ffectively;  (iii) rehabilitating and 
expanding infrastructure (e.g. road network, urban transport, water resources, energy, 
telecommunications, and information technologies);  and (iv) enhancing the development of human 
resources by allocating resources to health car e and education, labo ur, and nutrition.   
23. These measures had resulted in an impressive  economic performance since 2003.  The 
economy had registered a steady growth.  During FY  2004/05, inflation had been at 5.8% against a 
target of 5%.  Domestic debt to GDP ratio, the public sector wage to GDP , and revenue expansion 
results had been better than their initial targets. 
24. The Government continued to invest in rehabilitating and improving roads, improving 
Mombasa's port facilities, and developing the ener gy sector (in particular power generation and 
distribution, and oil exploration).  An efficient road network facilitated de velopment by allowing 
movement of goods, services, and people, and cr eating linkages between products and markets.  
Kenya had accelerated road construction and repair to  reduce transport cost.  In infrastructure, Kenya 
recognized that the private sector complemented pub lic resources, and a Privatization Act had been 
legislated.  
25. Despite these achievements, Kenya had encountered  various challenges in its efforts to meet 
the Millennium Development Goals.  On the goal of  eradicating extreme pove rty and hunger (goal 1), 
it had had problems integrating small businesses into  formal and global trade, and the drought had 
reversed some of the gains achieved in poverty reducti on efforts.  With regard to the development of a 
global partnership for development (goal 8), Ke nya appealed for assistance from the developed 
countries particularly the G8 members. 
26. Since 2000, Kenya had dismantled its quantitative r estrictions and price controls;  the tariff 
was now its main trade policy instrument.  It had al so dismantled most of its non-tariff barriers.  Its 
tariff structure had been simplified through reducin g the number of bands from five (0%, 5%, 10%, 
15%, and 25%) to three (0%, 10%, and 25%).  Incentive schemes had been rationalized.  Since 
1 January 2005, some of Kenya's trade policy instrume nts, in particular customs tariffs, had been set 
at the EAC level.  As a result, the current trade an d investment regimes were more liberal, predictable, 
and conducive. 
27. Kenya strongly supported the multilateral trad ing system.  It was committed to the DDA, 
which placed development at the core of the negotia tions.  The cost of a failed round would be felt 
most by developing countries.  In this regard, Kenya believed that its resumption, and successful 
conclusion, would help to integrate the developing  countries effectively into the global market, as 
well as complement Kenya's RTA efforts.  Since agriculture remained the backbone of Kenya's 
economy, the negotiations should effectively enhance agricultural market access.   However, increased 
market access in agriculture would be more benefici al if supply-side constraints were also addressed.  
In this regard, Kenya welcomed the Aid for Tr ade initiative and urged the fast-tracking of the 
declaration.  Other issues being negotiated were of equal importance to Kenya.  However, more 
flexibility was necessary to take into account Kenya's level of development.  WT/TPR/M/171 
 Page 7 
 
 
  V. OPENING STATEMENT BY THE REPRESENTATIVE OF UGANDA  
28. The representative of Uganda  said that the TPR was a positive step in linking the EAC 
members' regional integration efforts and processes to the multilateral trading system.  Uganda hoped 
that they would work together to develop their economies further.  
29. Uganda maintained a liberal trade policy and was committed to its WTO obligations.  In a 
number of areas, liberalization had been motivated by its national policy imperatives, while in other 
areas it had been done under the WTO auspices.  As a result, GDP growth had been very high, which 
had led to an increase in the shares of se rvices and manufacturing in the economy.   
30. The relative economic success of the East African region could be attributed to visionary 
political leadership and economic stability brought about by reform policies.   
31. For trade to promote economic growth, there had to be a shift from subsistence and primary 
raw production to secondary, more dynamic, and valu e-added production.  In this regard, Uganda 
needed a structural transformation to address  weaknesses in production capacities and to take 
advantage of market opportunities. 
32. Services and ICT were extremely important in Uganda's economic development.  Services 
were already contributing to close to 50% of its GDP, a trend that Uganda hoped would continue.   
33. At the regional level, there were efforts to harmonize economic, trade, and other policies in 
order to deepen integration.  The EAC countries we re working on promoting East Africa as a single 
tourist and investment destination;  they wished to be joined in their efforts by Rwanda and Burundi.  
The EAC was committed not only to economic integration but also to political federation.  
34. Uganda believed that the multilateral trading sy stem could address crucial development issues 
for the EAC members.  This included fair rules in intellectual property that allowed for transfer of 
technology and permitted innovation.  It also incl uded the need for increased market access and the 
challenge of overcoming supply-side constraints.  In the case of Uganda the energy crisis and 
infrastructure development were the main challenges.   WT/TPR/M/171 
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  VI. STATEMENT BY THE DISCUSSANT 
(i) Development challenges 
35. Kenya, Tanzania, and Uganda were amongst th e world's poorest countries, as indicated by 
their Human Development Index and per capita income .  The majority of their population lived in 
rural areas.  Infrastructure, particularly in rura l areas, was highly underdeveloped.  Over 50% of 
Kenya's and Tanzania's population worked in inform al employment.  More than half of Uganda's 
budget was financed by aid.  The discussant wonde red how trade liberalization could address these 
challenges, and what role it could play in reducin g poverty and increasing development.  There were 
no easy answers, and he wondered whether more liber alization and privatizati on, and the removal of 
taxes should simply be urged;  and how trade could promote development. 
36. Quoting Joseph Stiglitz, he highlighted that  the efficiency and welfare gains from 
liberalization would not necessarily occur in ec onomies with high unemploym ent levels and where 
markets did not work well due to the lack of supply capacity, weak infrastructure, and poor capital markets.  Careful sequencing, supply-side measure s, and complementary social adjustment policies 
would be needed to facilitate su stained growth and development. 
37. The discussant referred to goal 8 of the Millenni um Development Goals, the NEPAD, and the 
Paris Declaration on Aid Effectiveness as importa nt milestones in strengthening the partnership 
between donor countries and developing countries.  He asked how they could be applied to the 
multilateral trading system and the TPR.   
38. He noted that the developing countries had r esponsibilities:  developing their own economic 
development vision and implementation plan s, and transparent economic governance and 
accountability;  implementing their WTO obligations;  and participating in the multilateral trading 
system.  The developed countries' responsibilities were  to provide fair market access to developing 
countries exports;  build sufficient capacity in developing countries to enable their effective participation in the multilateral trading system (the Aid for Trade was a step in the right direction);  
ensure that the trading system was balanced;  and facilitate the effective participation of developing 
countries in the WTO by ensuring transparency and inclusiveness. 
39. Against this background, he proposed that in a review of this nature the policies and actions 
of partner countries were also under review for achieving the objectives of poverty reduction, 
development, and more effec tive global integration.   
(ii) The macro-environment 
40. The regional economic environmen t had improved significantly.  Governments' commitments 
to improve political and economic governance were re flected in improved investment flows, albeit 
from a low base, and relatively high growth. 
41. At the 2006 African Union Summit, Kenya's new administration had brought its policies and 
achievements under the scrutiny of the Africa Peer Review Mechanism.  Tanzania's newly elected 
government continued to build on a stable political  system.  Instability in the North of Uganda 
continued to be of concern.  All governments c ontinued to focus on poverty reduction and improving 
governance, growth, and equity.  In each country, an IMF Poverty Reduction and Growth Facility and 
a World Bank Country Assistance Strategy were in place.  
42. The improvement of political and economic governance was bearing fruit.  FDI flows had 
increased in each country, although from a low base, but  the most impressive results were in growth  WT/TPR/M/171 
 Page 9 
 
 
  rates.  The discussant asked what efforts and plans we re in place to continue to improve governance in 
order to ensure a sustained increase in growth and FDI. 
43. Since improved growth alone would not address poverty reduction,  job creation, and equity, 
the discussant asked how the governments were addressi ng the need to mainstream trade strategies 
into their national development strategies. 
(iii) Trade policies 
44. The most significant trade policy development ha d been the establishment of the EAC and the 
entry into force of the CET.  The CET overall  average applied tariff was 12.9% (19.7% on 
agricultural products and 11.9% on non-agricultural products).  About 99% of all tariff lines carried 
rates of 0%, 10%, or 25%.  The internal phase-down was asymmetrical;  imports from Tanzania and 
Uganda had gained duty-free treatment immediately,  while tariffs on some selected Kenya's products 
would be phased out by 2010. 
45. The discussant referred to the similarities betw een the EAC and SACU.  Their creation dated 
back to the early 20th century;  their institutional structures were similar; they had both built in the 
principle of asymmetry, albeit with different mechan isms;  and they saw the need to harmonize their 
policies.  Cooperation on infrastructure development, logistics, and trade facilitation would be crucial 
for the economic development of the East African re gion.  Sharing of experiences would be beneficial 
to both regions.   
46. Referring to regional integration organizations in Africa that were moving towards customs 
union, the discussant noted that some countries had overlapping membership.  They would need to 
rationalize their membership since they could not  be part of two cust oms unions and have two 
external tariffs.  The EAC and SACU were customs unions with experience of deeper integration and 
could play a significant role in rationalizing the integration processes in the southern, eastern, and central African regions.  The discussant asked wh ether the EAC members had any insights on this 
challenge.  He appreciated that intense discussi on on overlapping membership was under way in the 
EAC. 
47. The EC was engaged in regiona l integration in Africa through its Economic Partnership 
Agreement with the ACP countries.  Since 2004, there had been two country groupings for the 
negotiations:  the ESA-EPA group, including Ug anda and Kenya; and the SADC-EPA group, 
including Tanzania.  The discussan t asked whether the membership  of the EAC members in two 
separate regional negotiations with the EC might not create conflicting obligations and regulatory 
frameworks;  whether the negotiations would undermine the EAC efforts to build regional integration;  
and how the EC could reconcile th is contradictory outcome with its stated commitment to build 
regional integration in the ACP regions. 
(iv) Sectoral policies   
48. The discussant focused his remark s on agriculture due to time limitations.  The majority of 
the EAC population lived and worked in rural areas.  Agriculture was the main employer.  Its 
development had been characterized by slow grow th in Kenya and Tanzania and somewhat better 
performance in Uganda.  The main agricultural produc ts in the three countries were similar:  coffee, 
cotton, pyrethrum, cashew nuts, bixa, sugar cane, tea,  horticulture (cut flowers), wheat, and maize.  
Livestock, dairy, and fisheries were also important.  
49. There were strategies for revitalizing and devel oping the priority sectors in each country.  The 
potential for expanding production an d exports was significant in a number of products and sub-
sectors:  only 10 million hectares, out of over 44 million suitable for cultivation, were under WT/TPR/M/171 
Page 10  
 
  cultivation in Tanzania;  and only 4% of Kenya's cu t flowers production was exported.  However, this 
potential had been constrained by supply-side challe nges (poor infrastructure, and lack of capital and 
supply of credit).  In addition, erratic rainfalls had resulted in frequent droughts.  The agriculture 
development programmes of each country identified th e need to increase investment in infrastructure 
and extension services, but the national budgets had limited resources to fund these programmes.  The 
discussant asked how the Aid for Trade, including the Task Force recommendations for additional and 
more efficient aid delivery, could be harnessed  to implement these trade development needs. 
50. There was also much scope for regional f ood security:  Kenya produced only 80% of its 
maize needs, while Uganda was a net exporter of ma ize.  The discussant asked whether this potential 
was being explored. 
51. There were increasing possibilities for regional c ooperation.  For instance, following Kenya's 
success, Uganda had also become a significant export er of cut flowers and had developed cold storage 
facilities at Entebbe Airport. The discussant asked whether there had been efforts to maximize the 
potential for shared regional logistics capacity to facilitate exports. 
52. Several crops (e.g. cotton, maize, and sugar),  and beef and dairy products were heavily 
subsidized in developed countries.  About 6 m illion Kenyans relied on sugar cane production for their 
livelihoods;  cotton provided livelihoods for about 500,000 households in Tanzania;  and Uganda's 
Government had to subsidize its cotton farmers due  to the cotton price collapse in 2004/05.  The 
discussant asked how WTO Members could advance th e Doha negotiations and reduce the distortions 
in the prices of agricultural products.   
53. Fisheries employed 250,000 people in Uganda.  While the ban on its exports to the EC had 
been lifted for capture fisheries, aquaculture fisheries did not comply with EC residue and monitoring 
requirements.  Tanzania had 100,000 fishermen an d 500,000 people living off the sector.  Its fish 
exports to the EC had also suffered export restri ctions, but these had been lifted;  Tanzania now 
exported 80% of its fish to the EC.  The discu ssant asked how the EC could assist Uganda and 
Tanzania in developing standards that met its requirements. 
54. The discussant had posed challe nges to the EAC members and its main development partners 
to work together in a partnership to make the mu ltilateral trading system more responsive to the needs 
of its poorest members.  Members had a respons ibility to reduce poverty, and increase growth, 
sustainable development, and equity;  trade policy actions had to be judged against this benchmark.  WT/TPR/M/171 
 Page 11 
 
 
  VII. STATEMENTS BY MEMBERS 
55. The representative of Singapore  referred to the modest, although increasing, trade flows 
between Singapore and the EAC countries, in par ticular Kenya.  To address poverty reduction and 
greater integration into the world economy, the EA C members had continued with their economic and 
structural reforms and privatization programmes, a nd had undertaken trade liberalization measures.  
The CET had reduced Kenya's and Tanzania's applied tariffs.  As a result, real GDP growth had been 
high, despite the droughts and the low levels of FDI.   However, some areas of their trade regimes 
could be improved:  the sizeable difference between the CET and their MFN tariff rates;  the low level 
of tariff bindings;  and the EAC tariff structure with mixed escalation.  Services accounted for a 
significant part of their GDPs;  however, their potentia l remained largely unexploited.  In this regard, 
Singapore noted Kenya's initial offer on services and hoped that it would make greater commitments.  
The representative noted the important role pl ayed by the EAC members in the WTO.  
56. The representative of Canada  encouraged the EAC countries to continue with their economic 
reform programmes, characterized by further trade a nd investment liberalization, and driven by their 
WTO commitments.  Canada also encouraged them to give priority to reducing the barriers created by 
the EAC complexities (e.g. asymmetrical liberalization, overlapping membership, differing IPR 
policies, etc.);  these were impediments to FDI.  Implementation of structural reforms, including privatization, would also be needed to attract FDI.  The representative noted the areas in which 
Kenya's economic and trade reforms were being impl emented, and the areas targeted for reform.  
Canada appreciated Kenya's progress in working clos ely with international organizations and donors 
and welcomed its focus on private sector growth.  Canada congratulated Tanzania for its commitment 
to its economic reforms.  Tanzania was crea ting more attractive business conditions and was 
reforming its legal sector, with the help of the Ca nadian International Deve lopment Agency.  Canada 
encouraged Tanzania to continue work to im plement the DTIS recommendations, and to place the 
highest possible priority on addressing obstacles to FDI.  Canada welcomed Uganda's commitment to 
economic reforms.  Canada hoped that Uganda w ould address the factors that tended to reduce tax 
revenues.  Canada hoped that the discovery of oil would help to address some of Uganda's serious 
energy shortages;  and took note of the Govern ment's commitment to avoid social and economic 
distortions to which these discoveries had led in ot her countries.  Canada complimented Uganda for 
the effective measures taken to improve its banking system. 
57. The representative of Hong Kong, China
 noted the very good trade relations between 
Hong Kong, China and the EAC countries.  Hong K ong, China encouraged the three members to 
increase the coverage of their tariff bindings;  narro wing the gap between the bound and applied rates;  
bring down the applied rates that could exceed th eir corresponding bound rates;  and eliminate the 
various other charges on imports.  Services were an important contributor to their GDP, but were largely unexploited;  continued liberalization of trade in services was crucial to further economic 
growth and development.  Hong Kong, China ap preciated their efforts in undertaking economic 
reforms to enhance economic perf ormance and good governance.  Only Kenya had tabled its initial 
offer on services;  Hong Kong, China encouraged Ta nzania and Uganda to do so.  Tourism was an 
important employer and foreign exchange earner in the EAC, but was underdeveloped;  Hong Kong, 
China encouraged the EAC countries to consider impr oving their commitments in tourism in order to 
enjoy the benefits of further liberalization, such  as greater investment, improved infrastructure, and 
reduced costs. 
58. The representative of the European Communities
 said that this joint Review was a successful 
illustration of regional integration in Africa;  it de monstrated that the EAC members preferred to be 
seen as an entity rather than as individual trad ing partners.  Creating a customs union required 
determination and sacrifices;  the EC hoped that this  Review would allow for a joint assessment of the 
challenge areas and to see how the WTO system coul d help address them.  There were very important 
relations between the EC and the EAC countries within the WTO and through the EPAs.  The EAC WT/TPR/M/171 
Page 12  
 
  economic and business environment had progressed consider ably;  in particular, the entry into force of 
the customs union had increased trade within the bloc .  Its integration model was also attracting other 
African countries.  Given the size of the individual EAC economies, regionalism was the key to economic viability and sustainability.  Trade policy, and in particular the WTO system, helped work 
towards diversification of the economy;  further trade liberalization would help build up services and 
manufacturing and to progressively increase the share of added value.  The success of this process 
would depend heavily on creating and maintain ing a sound economic environment and providing 
stability for enterprises.  The ongoing reforms should be flanked by further steps to attract direct 
investment;  in this respect, the obligation to comply with WTO rules would be an impetus to 
continue and reinforce domestic regulatory reform.  Domestic reform also needed to continue in 
competition policy and government procurement.  The EAC countries would have to find the right 
balance between economic and social development.   The greatest possible coherence was needed 
between regional organizations where membership overlapped;  the EC therefore encouraged the 
EAC countries to define how far they were prepar ed to go together.  The EC provided technical 
assistance and capacity-building to the EAC countries,  through the Friends of EAC and the European 
Development Fund.  The EC encouraged the EAC to  continue its important work, embedded in its 
WTO membership.  
59. The representative of the United States
 said that this joint Review underscored the EAC 
members' commitment to regional integration, and was a clear signal of the progress toward breaking down trade barriers and unifying markets.  The United States strongly supported regional economic 
integration in sub-Saharan Afri ca and had proposed recently a Trade and Investment Framework 
Agreement to the EAC.  The EAC countries were  active beneficiaries of AGOA.  They were 
interested in diversifying their trade under AGOA, and the United States was working with them to 
achieve this through its Global Competitiveness Hub.   The representative referred to current U.S. 
trade capacity building assistance  to the EAC countries.  More was possible under the Millennium 
Challenge Corporation and he encouraged the EA C members to work towards developing a proposal 
in this connection.  The United States also encourag ed the three members to do more to integrate trade 
into their national development strategy.  It hope d that the EAC countries could further bind their 
tariffs and even reduce their bound levels, where th ese existed.  As LDCs, Tanzania and Uganda were 
not required to reduce their tariff, while Kenya would be expected to bind its tariffs at the average 
level of the Uruguay Round for developing countries.   The predictability and credibility of the EAC 
trade regime could be increased by reducing bound ra tes, enlarging the scope of their bindings, and 
removing other duties and charges.  Although the creation of the customs union was meant to simplify 
the tariff regime, several products had become subj ect to a special, higher duty.  The United States 
hoped that these products would be brought within the limit of the overall framework.  The United 
States encouraged the EAC countries to continue to engage in the services negotiations, in particular 
those related to infrastructure, which were so important in relieving s upply-side constraints. 
60. The representative of Colombia
 said that economic and social development was a challenge 
for the EAC countries due to the various obstacles.  The EAC members needed to make substantive 
progress in institutions and policy formulation.  Ther e had been shortcomings in the way aid provided 
by developed countries had been handled.  Since the EAC economies were based on agriculture and 
most of their population lived in rural areas, it wa s understandable that trade policy had not yet been 
systematically integrated into their development st rategies.  Developed count ries could help the EAC 
countries more by granting their products tariff- an d quota-free market access, with transparent rules 
of origin;  this would encourage the use of comp arative advantages and contribute to their economic 
development.   
61. The representative of Australia  stated that the modest trade relations between Australia and 
the EAC countries were expected to be deepen ed.  The EAC members had maintained positive 
economic growth rates through pruden t economic management and structur al reforms.  However, they 
remained highly vulnerable to external and intern al shocks, and faced the continued challenges of  WT/TPR/M/171 
 Page 13 
 
 
  widespread poverty, capacity constraints, and gove rnance issues.  Australia  encouraged them to 
continue efforts to develop ins titutional and policy frameworks to tackle corruption.  Australia 
believed that RTAs could complement the multilate ral trading system;  improving RTA disciplines 
through the WTO would help to ensure benefits  to all parties.  Australia commended the EAC 
countries, in particular Kenya, for their active and constructive role in the DDA negotiations.  
62. The representative of Brazil  congratulated the EAC countries for their economic progress.  
Brazil understood the challenges the EAC had to face to combine the interests of all the parties, with 
their different level of development, and to gra dually harmonize their regulations and policies, and 
establish the CET.  Intra-regional trade had been re levant to the EAC countries even before the CET 
was implemented.  Brazil believed that EAC exports were quite we ll diversified in terms of countries 
and regions of destination.  Trade between Br azil and the EAC was growing;  the EAC's open 
economy, with reasonably low average tariffs, had allowed an increase in imports.  For the EAC 
countries to benefit more from the multilateral trading system, the basic DDA reforms were 
imperative.  In agriculture, tariffs were the ma in trade policy instrument.  The representative 
wondered whether the EAC countries had a real ince ntive to increase their tariff bindings and reduce 
their bound tariffs when developed countries app lied distortive policy instruments and high tariffs, 
tariff peaks, and tariff escalation. 
63. The representative of Japan  noted Japan's commitment to assisting LDCs in their integration 
into the multilateral trading system, its contribu tion to the Aid for Trade budget, and its active 
engagement in Africa through the Tokyo Internatio nal Conference on African Development.  Japan 
appreciated the active participation of the EAC count ries, in particular Kenya, in the DDA.  Japan 
hoped they would make the most of their regi onal integration to reinforce their economic 
competitiveness and further integrate into the glob al economy.  Continued efforts to improve the 
investment climate were importa nt for economic development:  the EAC common customs tariff had 
yet to be fully acknowledged by officials;  Keny a's preshipment inspection coexisted with a similar 
institution in the EAC customs union, and it charged an import declaration fee on all imports, which 
should include the PSI costs.  Japan was concerned that this constituted a double taxation and hoped 
that Kenya would harmonize its system;  Japan hope d that the EAC would fully implement its policy 
on intellectual property protection.  
64. The representative of the Republic of Korea  said that expanding rela tions with Africa was one 
of Korea's foreign policy priorities;  and referred to Korea's initiative for Africa's development.  Korea 
welcomed the establishment of the customs union  and the introduction of the CET.  Despite 
difficulties, the EAC countries had recorded a very promising development;  however, to achieve the 
full EAC customs union and successful economic integra tion, continued structural reforms and further 
trade liberalization were needed, and overlapping  membership needed to be addressed.  Korea 
appreciated the EAC members' strong commitment to  the multilateral trading system and encouraged 
them to improve it by reducing bound rates, enlarg ing the scope of bindings, and further removing 
other duties and charges.  Korea was pleased to h ear that measures to harmonize non-tariff measures 
were already being undertaken.  Bilateral trade between Korea and EAC members was rising, though 
still relatively low.   
65. The representative of Norway  said that despite external shocks, the EAC countries had 
continued to make substantive progress.  Norway was interested to know what kind of technical 
assistance they would need to participate more eff ectively in and take adva ntage of the multilateral 
trading system.  Norway was also interested in th e broader EAC view on the Aid for Trade.  Norway 
had been granting quota- and duty-free access for all products from LDCs since 2002;  Norway hoped 
that Tanzania and Uganda had been able, and would continue, to benefit from this.  Norway 
welcomed the EAC countries' participation in RTAs ;  increased trade between countries in the South 
could be an important impetus to  economic development.  It was interested in hearing the EAC's 
views on RTAs in general, and whether they c ould promote economic grow th and reduce poverty. WT/TPR/M/171 
Page 14  
 
  66. The representative of Rwanda
 noted that Rwanda was in the process of joining the EAC.  
Rwanda commended the EAC countries for successfully  achieving important economic reforms.  The 
CET was a clear commitment to regional integra tion and contributed to increase international trade 
flows.  In this regard, Rwanda commended the EAC countries for having advanced and strengthened 
regional integration.  The EAC countries had also be en undertaking important sectoral measures;  and 
the private sector was increasingly playing a key role as a engine of growth.  However, the EAC 
countries were facing supply-side constraints and insufficiency in infrastructure.  In this regard, Rwanda urged development partners to provide increased financ ial and technical support (through the 
Integrated Framework, JITAP, and the Aid for Trad e).  Rwanda strongly hoped that this review would 
contribute to further trade development, ec onomic growth, and poverty reduction in the EAC 
countries, and to attract more FDI.  
67. The representative of the Separate Customs Te rritory of Taiwan, Penghu, Kinmen, and Matsu 
(Chinese Taipei)  said that the current volume of bilateral trade and investment with the EAC was 
small, but Chinese Taipei hoped that this woul d increase.  Chinese Taipei commended the EAC 
countries for their efforts to promote economic refo rm through trade policy instruments, and for their 
progress in trade liberalization.  It urged them to  continue to pursue furt her liberalization and full 
integration into the multilateral system.  The benefits  of the regional grouping could only be realized 
with the harmonization of customs procedures, ot her duties and charges on imports, and internal 
indirect taxes and fees on production.  Chinese Taip ei was concerned that the EAC's high CET might 
increase the costs of production of foreign investor s, and restrict their competitiveness;  Chinese 
Taipei encouraged the EAC members to continue  with their trade liberalization programmes and 
complete the transition to outward-oriented economies. 
68. The representative of Benin  supported the EAC members' economic reforms and recalled 
their objectives and achievements.  The EAC countries were continuing their efforts to improve and 
diversify their economies.  Yet, agriculture and services, particularly tourism, dominated their 
economies, and they faced difficulties in developi ng production and supply capacity in these sectors.  
Benin supported their determination to promote sub-regional and regiona l integration in Africa and to 
participate more fully in international trade.  Beni n urged bilateral and multilate ral partners to provide 
the EAC countries with the necessary support to enable  them to increase their participation in world 
trade, promote development, and eliminate poverty. 
69. The representative of the Dominican Republic  said that the EAC's management of efficient 
macroeconomic policies had improve d considerably.  Although they faced problems, such as drought,  
agriculture was a very important sector in term s of GDP and unemployment.  The representative 
highlighted the attention given to new sectors recently  (e.g. tourism) in order to diversify exports, and 
increase employment and growth.  She noted the development of SMEs;  and the plans under way to improve trade and telecommunications infrastructure.   The HIPC Initiative had played an important 
role in reducing Tanzania's and Uganda's exte rnal debt.  She noted the EAC countries' active 
participation in the DDA negotiations, and their efforts to meet their WTO commitments.   
70. The representative of Nigeria
 recalled the value of the TPR Mechanism for transparency.  
Nigeria commended Kenya for its reforms;  and for its  leadership role and commitments to the full 
integration of Africa.  Kenya had realized trem endous success in tourism but it needed to improve 
security in hotels and tourism sites to consolidat e its gains.  Since the lack of a harmonized, 
predictable policy on trade promotion would hamper trade activities, Nigeria urged Kenya to ensure a 
comprehensive national trade and industrial policy.  Nigeria commended Tanzania for the foresight on 
its trade policy objective, which emphasized th e importance of multilateral and bilateral trade 
negotiations.  While Tanzania's export and impor t policies were business friendly, it should be 
encouraged to intensify efforts to develop its ec onomic base.  Uganda's ma jor export destination was 
Europe;  however, it needed to improve its export st rategies with a view to expanding and diversifying 
its markets.  Uganda needed technical assistance  to reduce poverty, create jobs, and promote and  WT/TPR/M/171 
 Page 15 
 
 
  diversify exports.  The EAC was evidence of the success of regional integration.  The EAC's major 
challenge was to diversify production and trade, enha nce tourism, and rehabilitate the infrastructure.  
The EAC, particularly, Tanzania and Uganda, s hould be supported through increased technical 
assistance. 
71. The representative of Mauritius, in his capacity as ACP Group Coordinator , said that the EAC 
members' good economic health should stimulate the integration process in East Africa and contribute 
to its development.  Mauritius hoped that the TPR discussions would provide the EAC with new 
orientations for trade creation and progressive inte gration into the multilateral trading system.  The 
challenge for the EAC countries was to translate th e results of the EPA and the DDA negotiations into 
benefits, in order to sharpen their competitive advantage, contribute to building more productive 
chains, and sustain economic growth.  In this regard, the EAC countries should foresee how the WTO 
recommendations could be translated into the East African context to address trade and development constraints. 
72. The representative of China
 said that China enjoyed fruitful economic and trade relations with 
the EAC countries.  Cooperation and trade volumes we re increasing, and China had been providing 
various forms of assistance to the EAC countries fo r two decades.  China would continue to further 
enhance economic and trade cooperation with the EA C countries and Africa as a whole.  China would 
host the China-Africa Summit and the third Minist erial Conference of the Forum on China-Africa 
Cooperation.  China agreed with the discussant that  the multilateral trading system should be made 
more responsive to the needs of developing c ountries, and called on developed Members to 
substantially reduce their trade-distorting domest ic support, further expand market access, and 
steadily increase their assistance.  
73. The representative of Namibia  commended the EAC countries for their trade policies and 
their role in the multilateral trading system.  The EAC countries had enjoyed a long history of cooperation, and shared similar cu ltural norms and values.  They had identified trade as an important 
tool to achieve the Millennium Development Goals and had developed strategies to mainstream trade 
in national development policies.  The representative noted the differences in their economic structure 
and development level, and that they had establishe d a CET before eliminating internal tariff and non-
tariff barriers.  This implicitly suggested  that the customs union applied currently vis-à-vis  the rest of 
the world but relatively among themselves.  Nami bia asked whether the EAC countries applied 
common trade remedies on anti-dumping, counterva iling, and safeguard measures in relation to 
imports from outside the Community.  Namibia also  asked whether they intended to harmonize their 
monetary and fiscal policies.  W ith the accession of Rwanda and Burundi, the EAC would be caught 
between COMESA, SADC, and CEMAC;  Namibia w as interested in hearin g how the EAC intended 
to achieve the AU objective on the rationaliza tion and harmonization of regional economic 
communities with the view to attaining the African Economic Community. 
74. The representative of India
 said that the EAC had become a vibrant regional organization.  It 
contributed to economic and social development,  political understanding, and promoted regional 
integration.  The EAC had strived to develop relations with other countries and organizations.  India 
had ancient and present political, trade, and investme nt relations with the EAC countries.  The trend 
of bilateral trade was positive and encouraging.  He highlighted Exim Bank of India's significant 
investment in Africa, and India's technical and economic assistance to the EAC countries through the 
Indian Technical and Economic Cooperation pr ogramme and the Special Commonwealth African 
Assistance Plan.  Cooperation between India and th e EAC countries covered agriculture, railways, oil 
and gas, hotels, banking and insu rance, healthcare, SMEs, and HRD .  
75. The representative of Uganda  thanked the Chair and the Members for their observations and 
advice.  He recalled that the issues raised had rela ted mainly to the differe nces between applied and 
bound rates, the relatively low level of tariff bindi ngs, and overlapping membership.  Most of these WT/TPR/M/171 
Page 16  
 
  questions had been answered in writing.  The call on the three EAC partners to increase their bindings 
levels had been noted.  Under the DDA, LDCs had been granted flexibilities and encouraged to 
increase their bindings as a contribution to the Round.   They had also been granted flexibilities in 
services offers and asked to make requests in modes of interest to them.  The EAC partners welcomed 
these outcomes aimed at addressing the concerns of the poor developing countries.      
76. The EAC appreciated to the discussant's comme nts relating to the objectives of the Trade 
Policy Review and the constraints developing coun tries faced in achieving these objectives.  They 
acknowledged the need to address supply-side constrai nts if developing countries were to benefit from 
the DDA and market access under the multilateral trading system;  the need for careful liberalization;  
and the responsibilities of developed countries. 
77. They appreciated Members' advice on the need  to integrate trade policy into national 
development policies for increased economic growth and sustainable development.  Economic growth 
also depended on the capacity to provide stability for enterprises, the need to open markets to foreign 
service suppliers, the importance of domestic regulat ory capacity, and the need to develop supportive 
policies crucial for FDI to increase. 
78. The EAC states noted the call on the developed Members to continue fulfilling their 
obligations through assisti ng developing countries to develop trade capacity and fair trading rules, as 
well as continued provision of technical and financial assistance.  They welcomed the call for an early resumption of the DDA negotiations;  failure would be disastrous for the EAC economies. 
  WT/TPR/M/171 
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  VIII.  REPLIES BY THE REPRESENTATIVE OF KENYA ON BEHALF OF THE EAC 
PARTNER STATES AND ADDITIONAL COMMENTS 
(i) Macroeconomic environment 
79. The EAC partner states had initiated economi c reforms aimed at accelerating economic 
development and poverty reduction since their respectiv e previous TPRs.  As a result, they had been 
experiencing significant growth over the last two y ears, despite external shocks.  Signs of positive 
performance were broadly emerging.  A GDP growth of 7-10% per year was targeted over the medium- to long-term to effectively address povert y reduction.  The EAC countries had managed to 
contain inflation to a single-digit level over the past  three years.  The target was to contain it below 
5% in the medium- to long-term.   
80. Current account deficits had been maintained at  reasonably low levels and foreign exchange 
reserves at four months for Kenya, six months fo r Uganda, and eight months for Tanzania.  Kenya's 
current account deficit had been fairly consistent  since 2000;  Uganda's had remained high since 
2001;  and Tanzania's deficit had been declining due to a boom in its mineral exports.  The EAC 
economies target was to build gro ss foreign exchange reserves to a minimum level equivalent to six 
months of imports cover of  goods and non-factor services in the medium-term.  
81. There had been mixed performance on the budget deficits.  Kenya had maintained relatively 
low deficit levels with a positive balance in 2005.  Uganda's deficit had been high, supported by 
inflows of aid;  and Tanzania's deficit had aver aged 6%.  The EAC countries recognized the need to 
sustain low public account deficits in the long-run.  
82. Investment required urgent atten tion by all three EAC states.  Ov er the past decade, Tanzania 
and Uganda had seen an increase in FDI inflows, while Kenya had attracted relatively low levels.  
There had been general upward trend in FDI in the three countries in 2005.  Most of the inflows had 
gone to the natural resource sectors (mining and tourism).  The major challenge was to stimulate investments beyond these sectors and generate a higher level of linkages in the economy of the region.  
Only Kenya had significant outward FDI, most of which went to Tanzania and Uganda.  
83. The current privatization reforms were aimed at attracting new invest ment and improving the 
management of enterprises.  In the medium-term,  privatization policies across the three countries 
would attract new capital and technology transfer, an d attain broad-based ow nership through regional 
stock exchanges and cross listing.   
84. The savings to GDP ratio had been increasing st eadily from 2001 to 2004.  The target was to 
raise it to a minimum of 20%. 
85. Structural reform had started with the implem entation of the adjustment programmes in the 
1980s.  Implementation had been extended to pub lic service reforms and institutional capacity 
building;  agricultural sector marketing reforms;  di vestiture of SOEs;  financial sector reforms;  and 
legal sector reforms.  The process was now fo cusing on developing the private sector through 
establishing a suitable investment climate and building a competitive domestic private sector. 
86. Poverty reduction was a top priority.  Poverty remained high and was predominant in rural 
areas, although it was becoming increasingly significant in urban areas.  Income inequality was still a 
challenge.  
87. The EAC faced a number of development challenges.  Market access alone would not 
improve its people's livelihoods.  The medium-ter m development strategies focused on addressing WT/TPR/M/171 
Page 18  
 
  supply-capacity constraints, poor infrastructure, subsistence agricultural production systems, and 
inadequate access to financial services.  
88. Since improved growth alone would not address poverty reduction, employment creation, and 
equity, and since well defined trade policy, embedde d in national development plans, could contribute 
strongly to improving livelihoods, the EAC countri es were committed to improving economic and 
political governance.  The medium-term national development policies would mainstream trade 
strategies.  
89. In the last ten years, the EAC countries had held peaceful multi-party elections through 
democratic processes.  The EAC was also par ticipating in regional peace initiatives.   
90. The EAC partners were orginal Members of th e WTO.  They granted MFN treatment to all 
their trading partners and supported a fair and equ itable multilateral trading system.  The launch of the 
DDA had been an important milestone in the histor y of the multilateral trading system as it placed 
development at the centre of the negotiations.  It s slow progress and suspension was, therefore, a 
major concern to developing countries;  the EAC members fully supported its resumption.  For the 
EAC countries, the DDA priorities were:  improved market access for agricu lture products;  removal 
of non-tariff barriers;  and substa ntially reduction in domestic support.  In order to enable the EAC 
countries to maximize the benefits from increased ma rket access in agricultu re, assistance was needed 
in addressing supply-side constraints.  The EA C welcomed the Hong Kong Declaration and the 
subsequent recommendations by the WTO task fo rces on Aid for Trade and Enhanced Integrated 
Framework;  and called for their immediate implem entation.  The services negotiations should create 
opportunities, particularly under mode 4;  and it w as important that work on special and differential 
agreement-specific proposals, as well as outstandi ng implementation issues, should be concluded 
without delay.  The EAC countries needed technical assistance and capacity building to enhance their 
effective participation in the negotiations a nd implementation of the agreements.  A truly 
development-oriented  DDA outcome should sup port poverty reduction and provide policy space to 
allow the implementation of appropriate national policies that would enhance welfare and foster 
economic development.  
(ii) Trade policies 
91. The EAC reaffirmed its commitment to promoti ng regional integration as a building block for 
more effective participation in the multilateral tr ading system.  Trade was a multi-pronged tool for 
attaining and sustaining accelerated economic growth.   Trade liberalization, combined with policies 
for broad-based growth, could lead to improved we lfare.  Implementation of the customs union was 
putting in place institutions and structures to integr ate trade into national and regional development 
agendas. 
92. Tariffs remained EAC's main trade policy instru ment, in line with the WTO principles.  The 
customs union was built on three pillars:  the CET, the elimination of internal tariffs and other charges, and the removal of non-tariff barriers. 
93. The 2004 EAC Customs Management Act, which applied uniformly in the EAC countries, 
provided for a regional policy formulation framework and a decentralized operational structure vested 
in the members' customs administrations.  Valuation was based on GATT Article VII and was an integral part of the Act.  The EAC had adopted ha rmonized customs regulations that were expected to 
be implemented from November 2006.  Customs documentation/forms had been harmonized and configured to the members' customs automated systems.  A harmonization programme of the customs 
procedures was scheduled for January 2007.  WT/TPR/M/171 
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  94. The EAC countries applied a CET with three ba nds (0% for capital goods and raw materials, 
10% for intermediate goods and 25% for finished pro ducts).  There were 58 tariff lines – about 1% of 
the CET – that attracted higher duties ranging betw een 35% and 100% with the view to enhancing 
production and competitiveness, particularly in agri culture.  The duty on used clothes was aimed at 
developing the cotton sector.  This would furthe r enable EAC countries to fully build production 
linkages in textiles in order to gain mark et access under AGOA and other trade initiatives. 
95. The CET was based on the 2002 version of th e WCO Harmonized Commodity and Coding 
System.  Tariffs were applied on the c.i.f. value at  the entry point in the customs union, except for air-
freighted goods on which the freight component was excluded.  
96. Customs duty exemptions and concessions on impor ts had been harmonized and were applied 
uniformly.  Harmonization and convergence of fiscal  and monetary policy would be progressive.  
Preparations had begun for negotiations on the pr otocol on the common market and subsequently a 
monetary union.  There were committees on monetary  and fiscal affairs, which were responsible for 
harmonizing key macroeconomic variables. 
97. The lists of prohibited and restricted item s had been harmonized under the EAC Customs 
Management Act.  Licensing processes for restricted items were undertaken at the national level.  The 
licensing costs were set at the national level.   
98. Kenya had phased out preshipment inspecti on for customs purposes.  However, some 
products were subject to pre-export verification for conformity with health, safety, and environment 
standards.  Kenya had undertaken to phase out th e import declaration fee over a three-year period 
(starting in July 2007). 
99. The EAC acknowledged Members comments and qu estions on tariff binding coverage, and 
on narrowing the difference between bound and applied tariffs.  The EAC countries would continue to 
consider tariff bindings and the associated issues under the NAMA negotiations. 
100. The EAC partners remained committed to harmoni zing their trade policy instruments.  They 
were already reviewing other duties and charges. 
101. The EAC had adopted harmonized – and WTO-co nsistent – regulations and mechanism on 
safeguards, including countervailing and anti-dumping measures.   
102. The EAC Competition Act had been enacted re cently.  It provided for an institutional 
mechanism against unfair competition across the borders, including abuse of market dominance; mergers and acquisitions; public pr ocurement; and consumer welfare.   A competition authority would 
be responsible for implementing the law. 
103. The EAC Customs Union Protocol provided fo r an incentive regime aimed at accelerating 
development, and promoting and facilitating inv estment.  The regime comprised measures for 
building an enabling environment for export pr omotion schemes and for attracting FDI.  
Achievements included the harmonization of regul ations on EPZs;  the development of a model 
investment code;  and a joint export and inv estment promotion strategy and private sector 
development strategy.  Agreements had been also concluded to avoid double taxation.  Programmes to 
fully liberalize the capital account were under way.  
104. The EAC states were implementing programmes to  develop infrastructure and institutions, for 
conformity with health and safety standards, including the adoption of good agricultural and manufacturing practices as well as standards harmoni zation.  So far, 600 standards had been 
harmonized.  The EAC had enacted the Standardizati on, Quality Assurance, Metrology, and Testing WT/TPR/M/171 
Page 20  
 
  Act.  Substantial technical and financial assist ance was needed to establish accredited facilities for 
testing, inspection, and certification of standard s, and to develop an East African standards 
accreditation body. 
105. The EAC had adopted a mechanism to identify,  monitor, and remove non-tariff barriers.  
National monitoring committees (linked to the Re gional Monitoring Comm ittee and coordinated by 
the Directorate of Customs and Trade) had been established. 
106. The EAC Treaty recognized IPRs as an important tools for trade and a cornerstone of a 
knowledge-based economy.  They were the catalyst for innovation and creativity, which were the 
basis of private sector competency and competitiv eness.  The EAC countries were party to regional 
and international IPR treaties and agreements.  They  were making significant efforts to formulate and 
implement harmonized IPRs policies.  The success of these efforts required measures to raise public 
awareness, which required substantial resources.  The EAC countries appreciated the technical and 
financial assistance received from some Members and appealed for additional resources to fulfil their 
multilateral obligations.  In this regard, the EAC ap preciated the extension (to 2013) of the deadline 
for LDCs to comply with the TRIPS Agreement.   EAC sought technical assistance from Members and 
other agencies to build capacity to be TRIPS compliant. 
107. The EAC had taken note of the interest shown on the issue of government procurement and 
its status in the WTO. 
108. LDCs had been granted flexibilities for tab ling their offers on services, and developed 
countries had been asked to make offers in modes of interest to LDCs.  The EAC members welcomed 
those outcomes. 
109. The EAC partners had been at the forefront in  calling for enhanced development assistance to 
address the supply-side constraints that hindered their effective integration into the multilateral 
trading system.  In this regard, they appreciated the continuing efforts of the WTO Director-General.  
Aid for Trade was crucial for tackling supply-side constraints.  
110. The EAC region needed major investments to de velop infrastructure, e.g. transport, power 
and water utilities, agriculture-related infrastructure, and capacity for conformity with standards.  The 
EAC called for the speedy operationalization of Aid for Trade and urged the developed WTO 
Members to honour their commitments so as to make the scheme effective.   
111. The EAC partners had had commitments under other trade arrangements prior to the entry 
into force of the customs union.  In this regard , the EAC had undertaken to coordinate its trade 
relations to establish convergence and facilitate the implementation of a common trade policy.  Noting 
the complexity of participating in multiple trad ing arrangements, the EAC countries were holding 
consultations to streamline and rationalize their me mbership in the regional economic blocs.  The 
EAC had also started consultations  with COMESA and SADC on deve loping trade relationships.  The 
negotiations for the admission of Rwanda and Burund i to the EAC were at an advanced stage.   
(iii) Sectoral policies 
112. Agriculture played an important role in th e economies of the EAC countries.  The regional 
objective was to improve productivity, and prom ote value addition and competitive agricultural 
supplies to realize cross-border trade for sust ainable food security.  Therefore, the EAC had 
formulated a regional strategy that entailed iden tifying high-value agricultu ral subsectors for which 
the region had comparative advantages;  and had cap italized on investments that could help to shift 
from comparative to competitive a dvantages by facilitating movement up the value chain.  It had 
identified activities that were more amenable to regional cooperation, e.g. agricultural research on  WT/TPR/M/171 
 Page 21 
 
 
  similar agronomic zones, seed multiplication and distribution, livestock multiplication and 
distribution, plant and animal diseases control,  irrigation and water catchments management, and 
developing mechanisms of inform ation exchange about food security. 
113. The EAC states recognized the need for envir onmental management and economic utilization 
of natural resources for sustainable development.  The objective was to reduce threats to human health 
and ecosystems, promote sustainable development,  and manage natural resources on a sustainable 
basis by implementing the EAC Protocol on En vironment and Natural Resource Management, 
harmonizing mineral laws and polic ies, undertaking joint resource management, and exploiting and 
supporting joint research.  
114. The EAC had completed the East African Power Master Plan and was implementing a 
mechanism that focused on priority power generation projects in order to increase access to sufficient, 
reliable, affordable, and environm entally sound energy sources.  The EAC was currently developing a 
regulatory framework for a power-sharing pool and identifying funding support. 
115. Industrial development was instrumental in ge nerating and diffusing technology.  Technology 
was an important source of competitiveness.  The economic transformation was to be addressed 
through the East African Industrialization Strategy.  SMEs played an important role and were known 
for their potential to create jobs and generate inco me.  Promotion of SMEs was a component of the 
industrial strategy.  
116. The EAC partners had agreed to work together  to promote and maximize the gains arising 
from tourism.  They were required to undertake a nd develop a regional strate gy for tourism promotion 
aimed at maximising the benefits from sustainable tourism and wildlife resources.  This included 
promoting East Africa as a single tourist destina tion;  operationalizing the East African Tourism and 
Wildlife Conservation Agency;  implementing the criteri a for classification of hotels, restaurants, and 
other tourist facilities;  harmonizing policies and legislation on wildlife conservation and 
management;  adopting a regional approach in wildli fe protection;  adopting a regional approach to 
participation in regional and international tr eaties/agreements on wildlife conservation and 
management;  and enhancing capacity build ing in the tourism and wildlife sector. 
117. Bridging the infrastructure gap could deepen integration through the sharing of the 
production, management, and operations of the facilities, hubs, and corridors.  The current 
infrastructure needed urgent improvement to fac ilitate business and encourage investment.  Strategic 
regional infrastructure interventions were key to  attracting investment, improving competitiveness, 
and promoting trade.   The regional objective was to  improve road connectivity through the complete 
construction of prioritized regional roads and the institutionalization of their maintenance, and the 
continued harmonization of tr affic laws, including vehicle and road regulations.   
118. Civil aviation was crucial in the movement of people, goods, and services.  Emphasis was 
being placed on harmonizing policies to promote saf e, efficient, and economically viable civil 
aviation to enable it to play an effective role in  the regional transport infrastructure.  Initiatives 
included implementing the Search and Rescue Agr eement and establishing the EAC search and rescue 
administration;  harmonizing and implementing civil aviation programmes, projects, and regulations;  
establishing and operationalizing the East African Civil Aviation Safety and Security Oversight 
Organisation;  establishing and operationalizing th e EAC Upper Airspace Administrative Centre;  
finalizing the Common Aviation Policy;  and fully liberalizing civil aviation activities in East Africa. 
119. The EAC had commissioned a consultancy to develop a railway master plan.  Kenya and 
Uganda had jointly concessioned their railway systems to improve their efficiency;  Tanzania was in 
the final stages of doing so. WT/TPR/M/171 
Page 22  
 
  120. The regional objective was to have informa tion and communication technology integrated 
into regional development initiatives.  The activities being undertaken were to implement the Cross 
Border Connectivity Project;  complete the Regional Telecommunication Trunking Project;  
coordinate and harmonize inform ation and communication technology policies;  and facilitate the 
implementation of the East African System Marine Cable.  
121. The EAC countries were committed to the multilateral trading system and determined to 
successfully uplift the living standards of their peopl e.  The EAC would use the regional integration to 
integrate their economies into the multilateral trading system.   
122. The discussant
 highlighted the high level of openness dur ing this Review.   The presence of 
the high level EAC delegations showed their seri ous commitment to regionalism and the WTO.  He 
appreciated how difficult it was to bring these delegati ons together and to discuss so many and such 
complex issues.  Referring to Uganda's closing rema rks, the discussant was pleased that some of his 
remarks had been taken on board, e.g. regarding Uga nda's role as a WTO Member;  the challenge to 
provide the necessary leadership in developing natio nal development strategies;  and commitment to 
build political and economic governance.  Uganda need ed to continue to implement trade policies and 
obligations within its means.  Members recognized  the participation of the EAC countries in the 
WTO.  Uganda had taken on boa rd its responsibilities and also recognized that others had 
responsibilities.   
123. On the macroeconomic environment, the discu ssant commended the EAC for its commitment 
to build political and economic governance, whic h was a prerequisite for sustained economic 
development.  Their efforts were bearing fruit as there were real indications of improved economic 
environment.  The governments were committed to tackling some big challenges and making reforms 
in a range of areas, as well as making efforts to improve the investment environment.  The EAC countries would need a lot of help to address suppl y-side infrastructure constraints due to domestic 
budget shortfalls.  They had put their hopes on th e DDA and challenged the developed Members to 
address issues related to trade policies, market a ccess, domestic support, non-tariff barriers.  The EAC 
countries had highlighted the importance of mode 4 for their economies;  developed countries would 
need to contribute through their commitments.   
124. The discussant commended the EAC partners fo r establishing uniform rates for 99% of the 
CET.  For 1% of the tariff, however, there was a co mplex structure that would have to be addressed in 
a manner that would contribute to  development and build on comp etitiveness but not create negative 
tariff escalation.  It was important that policy objectives for one side of the economy did not 
negatively affect another side, and that the EAC members were free to address their policy goals.  
Many developed country Members had tariffs in excess of 100% for many agricultural, and in the 
current negotiations some were calli ng for 8% to 15% of their agricultural tariff lines to be classified 
as sensitive so that they could con tinue to enjoy protection.  Deve loping countries should not be urged 
to move at a pace that was faster than might be helpful for their own development. 
125. The EAC had taken major steps toward common policies in trade remedies, export, 
investment, IPRs, competition, and standards.  Re ferring to the EAC trade capacity building needs, 
Members now had clear indications on development priorities and should be able to work with the 
EAC members to build capacity in these areas.  The EAC countries had begun to discuss the issue of 
overlapping membership in regional groupings.  Th e EAC would contribute to a more rationalized 
regional integration process in East Africa and Africa as a whole.   
126. On sectoral issues, agriculture was crucial.   The Doha Round should reduce the trade 
distortions due to domestic support and subsidi es, and create a more conducive environment for 
agriculture potential.  The EAC countries needed to and were committed to addressing productivity, 
building high value-added sectors a nd segments, and cooperating to bui ld food security.  They would  WT/TPR/M/171 
 Page 23 
 
 
  also need to address their infrastructure problems, and this might be best tackled regionally.  On 
tourism, working together to offer regional touris ts packages, and harmonizing policies and standards 
would be a powerful incentives to increase tourism in East Africa.  There were some complex 
challenges regarding roads, civil aviation, and rail issues.  
127. The discussant said that this TPR should be a ddressed differently from others, and deal with 
three issues in a slightly different way.  Members needed to think about how to increase the openness 
of the EAC economies while addressing the need to increase development in the region.  Creating a 
proper balance between trade policy, trade openi ng, and economic devel opment was crucial.  
Regarding poverty reduction, the WTO was only one of many institutions that could contribute to the 
development of countries and address poverty reduction.  He urged Me mbers to find a way to address 
these issues jointly with these other institutions and to  build greater coherence in order to place trade 
policy within a broader context, with the crucia l objective of reducing poverty.  Developing countries 
could not succeed alone, assistance from their devel oped country partners was essential.  Thus, on the 
issue of joint responsibility, there was a good reas on to review developed and developing countries 
jointly, pparticularly in areas crucial for development;  this issue needed to be discussed further.    
128. The representative of Mauritania  said that the EAC countries were undertaking deep 
economic reforms.  Kenya had adopted a strategy of economic r ecovery, and job and wealth creation 
in which the private sector played a central role and investors enjoyed a favourable environment.  
Kenya's positive achievements resulted from its heal thy macroeconomic policy.  Tanzania was also 
following an economic reform policy and initiatives to  diversify the economy;  it had maintained high 
growth.  Its national trade policy document called fo r export-driven growth.  Tanzania's future was 
good.  Uganda was continuing its liberalization polic y, and had consolidated its trade policy.  Its 
competitive strategy in the private sector was ai med at setting up an environment propitious for 
growth of private investment and savings.  Uganda  had recorded high growth and could optimistically 
look forward to the achievement of the Millennium  Development Goals.  The EAC countries were 
original Members of the WTO;  their contribution was significant.  They were pioneers in regional 
integration.  They needed the support of the inte rnational community in their development strategy 
and integration in the world economy. 
129. The representative of Zambia  commended the EAC for putting in place the relevant legal and 
institutional framework to provide a strong future customs and monetary union.  The EAC countries 
faced the challenge of dealing with the multiplicit y of preferential trade arrangements and overlapping 
membership. He believed that they would find succeed  in aligning their process and effectively attain 
a customs union.  Zambia urged them to take full advantage of their WTO membership to help them 
realize their regional policy objectives. 
130. The representative of Zimbabwe  recalled the impressive economic growth achieved by the 
EAC countries.  Referring to overla pping membership, he said that th ey would have to withdraw from 
some of the regional arrangements.  Zambia hoped that the EAC consolidated on its reforms, in 
particular to strengthen South-South trade.  The implementation of deeper structural reforms, and 
trade liberalization should ensure that the rules of  the multilateral trading system did not increase the 
burden on the EAC countries. Zambia hoped that  these reforms would support the development 
processes and poverty reduction. 
131. The representative of the United States  said that the United States supported strongly regional 
economic integration in sub-Saharan Africa.  The EAC countri es were active AGOA beneficiaries and 
had started to diversify their AGOA exports.  Th e United States was concerned that LDC Members 
were in FTAs or customs unions with non-LDC Memb ers.  The United States strongly believed that 
FTAs or customs unions should increase world trade liberalization;  EAC creation and expansion should allow countries to undertake normal liberaliz ation.  The United States encouraged the EAC 
members to increase their level of bindings;  Keny a, in particular, should bind substantially all its WT/TPR/M/171 
Page 24  
 
  tariffs at the level achieved by other developing countries in the Uruguay Round.  The United States 
also encouraged the EAC states to engage in th e services negotiations, in particular infrastructure 
services.  The United States noted Kenya's efforts in the services negotiations.   
132. The representative of th e European Communities
 said that the EC had noted the ongoing and 
future steps in various important areas.  The EC requested more information on the progress of the 
consultations on overlapping partic ipation in regional organizations and on the implementation of the 
CET.  The EC was committed to providing technical assi stance and development aid, in particular in 
infrastructure.  The EC representative from Brusse ls encouraged the EAC to continue with its 
initiatives on competition and creating a common invest ment area, which were the building blocks of 
a common market.  Trade liberalization alone was no t necessarily bringing about development;  this 
was why the EPAs were not mainly about trade liberalization but about building regional markets.  
Regional markets should bring about developmen t, and development should bring about trade 
liberalization.  It was important that the EA C was opening to the world while deepening its 
integration.  The CET was a relatively liberal tari ff.  Referring to overlapping membership, the EC 
feared that too many, and sometimes incompatible, objectives could distract members from the goal 
of regional integration and the building of a real market.  She reiterated the EC's commitment to the 
development of the region and to the regional inte gration, through various aid initiatives.    
133. The representative of Kenya, on behalf of the EAC countries , said that they were encouraged 
by the Members' acknowledgement of their efforts,  including the structural reforms.  They were 
committed to consolidating their gains by undert aking further reforms to ensure sustained and 
accelerated economic growth through deepening regi onal economic integration.  Despite the positive 
gains, their economies continued to face supply-si de constraints that impeded productive capacity, 
which slowed their efforts to meet the Millennium  Development Goals, especially poverty reduction.  
The EAC would continue to implement its reforms a nd invited its development partners to join it by 
meeting their side of the bargain, in particular the commitments to MDG no. 8.  
134. The EAC states appreciated the advice received from Members, which would advance the 
integration process within the region.  In this regard, they believed th at this Review would assist them 
in hastening the realization of an economic commu nity with free movement of capital and labour.  
They also believed that this TPR would catalyze Me mbers to appreciate their efforts and challenges. 
135. The EAC members would respond in writing to any questions not fully addressed.  They fully 
endorsed the discussant's recommendations on trade policy advice to developing countries;  on 
making poverty reduction a priority in multila teral trade;  and on joint reviews. 
136. The representative said that the EAC countri es were committed to putting the DDA back on 
track, and were waiting an outcome that addressed  their development needs and concerns.    WT/TPR/M/171 
 Page 25 
 
 
  IX. CONCLUDING REMARKS BY THE CHAIRPERSON 
137. This first joint Trade Policy Review of the E ast African Community (EAC) partner states has 
allowed us a better understanding of their trade regi mes, and of their policies and aspirations. Our 
dialogue has been thorough and comprehensive, stim ulated by the full and open engagement of the 
high-level delegations of Kenya, Tanzania, and Uganda, as well as of the EAC Secretariat.  Our 
thanks are also due to our discussant fo r his very insightful contribution.  
138. Members commended the EAC partner states for their progress, despite adverse consequences 
of droughts, in their economic reform programmes in which trade and investment liberalization had played a key role. In the light of their recent macroeconomic performance, the EAC partner states 
were encouraged to move ahead in implementing st ructural reforms so as to build up an environment 
conducive to sustainable economic growth and devel opment.  Reforms in the energy subsector would 
help by reducing production costs, particularly in the manufacturing sector. 
139. Members appreciated the EAC partner states' firm commitment to the multilateral trading 
system, including the Doha Development Agenda.  Th ey welcomed efforts made by the EAC partner 
states in simplifying their tariff regime. Nonethel ess, some Members emphasized that lack of 
harmonization within the EAC in certain key trad e measures, such as in ternal taxes, customs 
procedures, other duties and charges on imports , and fees on production, undermines the utility of 
having a common external tariff.  They expressed hope that the full establishment of the customs union, and harmonization of monetary and fiscal polici es would contribute to the further integration of 
its members into the global economy.  Members en couraged the EAC partner states to reduce their 
bound rates, enlarge the scope of their tariff bindi ngs, eliminate their applied compound tariffs (all 
bound duties being ad valorem ), and Kenya and Tanzania to rem ove their other duties and charges 
bound at zero. 
140. Members noted that the EAC partner states were benefiting from non-reciprocal preferences, 
while also participating in various preferential tr ade arrangements. Several Members called attention 
to the complications of trade policy-making stemming from membership in overlapping preferential 
arrangements. This was not only difficult to manage , given the limited resources available, but could 
also detract from multilateral efforts.  
141. Members encouraged the EAC partner states to  further liberalize their services sector, and 
enhance their commitments under the GATS. Members also sought clarification on a number of 
issues, notably: customs procedures and valuation, including preshipment inspection; contingency trade remedies; standards and SPS measures; state- owned enterprises and privatization; government 
procurement; protection of intellectual property ri ghts; and agriculture and related activities.  
142. Members expressed their appreciation for the co mprehensive responses to their questions as 
provided by the delegations of EAC partner st ates and looked forward to further responses. 
143. In conclusion, the numerous interventions, ques tions in particular, by Members during this 
Review are indicative of their interest in EAC partner states' trade regimes. Members value EAC 
states' efforts to improve their economic envir onment and reduce poverty. As small economies that 
are highly dependent on foreign trade, they have a lot to gain from an open trade environment.  
I encourage them to continue improving their multilateral commitments, both on goods and services, with a view to enhancing the predictability and cred ibility of their trade regimes. Trading partners can 
help by ensuring that their markets are fully open, and by providing appropriate technical assistance;  
the recent Aid for Trade initiative could also help. 
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