Disputes push countries into bilateral deals to ensure seamless flow of trade

Kenya and Uganda have has a trade dispute over milk imports. PHOTO | FILE | NATION MEDIA GROUP The milk imports row between Kenya and Uganda capped a year of simmering trade disputes between East African Community (EAC) member countries, undermining free movements of goods and services in the region.

Kenya and Uganda last week reached a deal on taxation of pharmaceuticals, juices, and milk products, which had threatened to push the two neighbouring countries into a collision course.

The EastAfrican has learnt that Uganda has agreed to abolish the 13 per cent excise duty charged on Kenyan juice and removed 12 per cent verification fees payable on Kenyan pharmaceuticals by June 30, 2020 as part of a string of measures aimed at averting further trade disputes with Kenya.

Uganda had introduced the discriminative excise duty on Kenyan juice and verification fees on pharmaceuticals under the Excise Duty Amendment Act 2017.

Although Kampala had committed to address discriminative excise duty and verification fees by June 30 this year, it did not.

The agreement was reached during a bilateral meeting held in Kampala between trade officials from the two countries led by Kenya’s Principal Secretary in the Ministry of Trade Chris Kiptoo and his Ugandan counterpart Grace Choda.

Kenya, on its part, has lifted the recent ban on exports of poultry products to Uganda that was imposed on February 14 this year and also committed to increase market access for Ugandan sugar to 90,000 metric tonnes from 30,000 metric tonnes, subject to a verification mission by Kenya in February next year.

Kenya also lifted the long-standing ban on export of beef and beef products to Uganda. The two countries also agreed that Kenya imposes 16 per cent value added tax (VAT) to control excessive influx of Ugandan milk into the Kenyan market and protect local dairy farmers.

“What we need is harmony in the region. We have decided that the year 2020 will be a year of harmony and free trade in the region. We need to live within the spirit of a Customs Union. We are seeing a situation whereby countries want to look for domestic reasons not to allow regional trade to flourish,” Dr Kiptoo told The EastAfrican .

The deal between Nairobi and Kampala comes after Kenya and Tanzania in May announced that they had resolved 75 per cent of the non-tariff barriers (NTBs) that had affected trade between them, sparking persistent trade wars.

“We need […]

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