WTO TRADE FACILITATION SYMPOSIUM:WTO TRADE FACILITATION SYMPOSIUM:BETTER BORDER MANAGEMENT: BETTER BORDER MANAGEMENT:

East African Community (EAC)East African Community (EAC)Presented by:Presented by:

Mr. Dickson Poloji, Policy Analyst , EABCMr. Dickson Poloji, Policy Analyst , EABC13-1513-15thth November 2012 November 2012

Presentation Outline

About East African Business Council (EABC).About East African Business Council (EABC).

Introduction.Introduction.

Trade Facilitation-EAC Border management.Trade Facilitation-EAC Border management.

Importance of better border management Importance of better border management

Proposed trade facilitation program for EAC Proposed trade facilitation program for EAC

Countries. Countries.

Other trade facilitation measures. Other trade facilitation measures.

About East African Business Council (EABC)About East African Business Council (EABC)

EABC:EABC: is an apex body of the Private sector in the East is an apex body of the Private sector in the East African Community (EAC) Partner States. Established in African Community (EAC) Partner States. Established in 1997 with support from EAC to ensure that the EAC 1997 with support from EAC to ensure that the EAC policies are Private Sector friendly. policies are Private Sector friendly.

The mission: The mission: is to represent and promote the interests of is to represent and promote the interests of the EAC Business Community; provide value added the EAC Business Community; provide value added services that create new business opportunities, enhance services that create new business opportunities, enhance global competitiveness of EAC businesses and actively global competitiveness of EAC businesses and actively influence government policies to improve the enabling influence government policies to improve the enabling business environment.business environment.

Relationship with EACRelationship with EAC: - “Observer Status” in all relevant : - “Observer Status” in all relevant activities and institutions of the EAC. Currently seeking a activities and institutions of the EAC. Currently seeking a more binding framework of engagement with the EAC more binding framework of engagement with the EAC secretariat. secretariat.

INTRODUCTION INTRODUCTION From Customs Union to Common EAC Market From Customs Union to Common EAC Market

INTRODUCTIONINTRODUCTION

Customs Union + Single Customs TerritoryCustoms Union + Single Customs TerritoryAlthough EAC is at Common market stage , It is Although EAC is at Common market stage , It is

still consolidating the stage of Customs Union and still consolidating the stage of Customs Union and trying to make it functional through formation of trying to make it functional through formation of Single Customs Territory.Single Customs Territory.

Under the Single Customs Territory, EAC is Under the Single Customs Territory, EAC is discussing two pillars: Customs management and discussing two pillars: Customs management and Free circulation of goods.Free circulation of goods.

Under these two pillars, EAC is reviewing how to Under these two pillars, EAC is reviewing how to facilitate the flow of good through internal and facilitate the flow of good through internal and external borders.external borders.

Trade Facilitation - EAC Border Trade Facilitation - EAC Border Management Management

Trade facilitation at border points is still a major Trade facilitation at border points is still a major issue. It is affecting the clearance of goods.issue. It is affecting the clearance of goods.

Border clearance processes are amongst the Border clearance processes are amongst the most problematic links in the supply chain and most problematic links in the supply chain and frequently undermine competitiveness by frequently undermine competitiveness by increasing the cost and reducing reliability of increasing the cost and reducing reliability of supply. supply.

The time schedules at the border posts are not The time schedules at the border posts are not synchronized. synchronized.

Border controls interfere with free circulation of Border controls interfere with free circulation of goods.goods.

Trade Facilitation - EAC Border Trade Facilitation - EAC Border Management Management

Some NTBs occurs at the Borders.Some NTBs occurs at the Borders.Numerous non customs state agencies involved in Numerous non customs state agencies involved in

clearance of goods clearance of goods “The speed of the swam of locusts is determined by the slowest

locust.”Necessary infrastructure and standards for border Necessary infrastructure and standards for border

management may be lacking. e.g powermanagement may be lacking. e.g powerUnderstanding of the new customs procedures. Flow of Understanding of the new customs procedures. Flow of

information on the customs procedures and requirements.information on the customs procedures and requirements.Lengthy and varying customs procedures. Lengthy and varying customs procedures. Delay in clearance of goodsDelay in clearance of goods

Importance of better border Importance of better border management management

Facilitates smooth and faster flow of cargo across Facilitates smooth and faster flow of cargo across the borders .the borders .

Promotes intra-EAC trade. Promotes intra-EAC trade. Enhances free circulation of goods.Enhances free circulation of goods.Reduces cases of NTBs.Reduces cases of NTBs. Improve predictability and reliability of Improve predictability and reliability of

shipments.shipments.Reduces transaction costs at the bordersReduces transaction costs at the borders

EAC Trade flow, 2007-2010 (US$ Million)

KAM 1959-2009: 50 Years of Manufacturing Excellence.

Table 8 % of Intra-EAC Trade to the Total Trade (Source: EAC Facts and Figures 2011)

Country 2007 2008 2009 2010

Intra- Exports 1,680.3 2,180.8 2,210.1 2,355.7Intra- Imports 1,148.9 1,484.3 1,655.4 1,764.6Total intra-EAC Trade 2,829.2 3,665.1 3,865.5 4,120.3Total EAC Trade (EAC + rest of world) 26,886.56 34,469.75 31,806.62 37,100.48% of Intra-EAC Trade to Total Trade 10.5% 10.6% 12.2% 11.1%9

Total Intra-EAC Trade 2010

Total Intra-EAC Trade

11.1%

Total EAC Trade with the

rest of the world88.9%

Trade

Total Intra-EAC Trade

Total EAC Trade with the rest of the world

10 KAM 1959-2009: 50 Years of Manufacturing Excellence.

Proposed Trade Facilitation Proposed Trade Facilitation program for EAC countries program for EAC countries

Definition of the Concept - Definition of the Concept - One Stop Border Post (OSBP)One Stop Border Post (OSBP) An integrated border system under the OSBP model aims An integrated border system under the OSBP model aims

to bring together all the border agencies for improved to bring together all the border agencies for improved efficiencies through streamlined, coordinated and efficiencies through streamlined, coordinated and harmonised operations. harmonised operations.

The legal framework to support OSBP is still being The legal framework to support OSBP is still being finalised. finalised.

A Bill for OSBP is still going through approval process.A Bill for OSBP is still going through approval process.

Proposed Trade Facilitation Proposed Trade Facilitation program for EAC countries program for EAC countries

Benefits of One Stop Border Post (OSBP)Benefits of One Stop Border Post (OSBP) To reduce transit times for traders and transporters To reduce transit times for traders and transporters

leading to more effective use of available resources and leading to more effective use of available resources and assets at a lower cost.assets at a lower cost.

To improve competitiveness for goods in the region due To improve competitiveness for goods in the region due to reduced processing times at the border which are to reduced processing times at the border which are assumed to translate into reduced costs.assumed to translate into reduced costs.

To enhance the reliability of the supply chain through To enhance the reliability of the supply chain through streamlined and harmonised procedures resulting in streamlined and harmonised procedures resulting in predictable movements of cargo.predictable movements of cargo.

To develop better operational controls through shared To develop better operational controls through shared and improved exchange of information among agencies.and improved exchange of information among agencies.

Proposed Trade Facilitation program for EAC countries

One Stop Border Post for Internal Borders Partner States are expected in future to establish and Partner States are expected in future to establish and

implement one stop border post at the common borders implement one stop border post at the common borders and may enter into such bilateral agreement as may be and may enter into such bilateral agreement as may be necessary.necessary.

There is bilateral Agreement between United Republic of There is bilateral Agreement between United Republic of Tanzania and Republic of Rwanda to establish and Tanzania and Republic of Rwanda to establish and implement one stop border post at Rusumo. implement one stop border post at Rusumo.

There are other proposed One Stop Border Posts e.g. There are other proposed One Stop Border Posts e.g. Malaba Border, Namanga, Holili/Taveta.Malaba Border, Namanga, Holili/Taveta.

Proposed Trade Facilitation Proposed Trade Facilitation program for EAC countries program for EAC countries

One Stop Centre for External Borders This option proposes the promotion of the One Stop This option proposes the promotion of the One Stop

Centre concept at the main sea ports into the region such Centre concept at the main sea ports into the region such as Mombasa and Dar es Salaam Ports.as Mombasa and Dar es Salaam Ports.

Under this set up, each Partner State would have direct Under this set up, each Partner State would have direct responsibility for clearing goods destined for its country responsibility for clearing goods destined for its country and for ensuring that revenues are remitted to the and for ensuring that revenues are remitted to the destination states.destination states.

To start with the main sea ports at Mombasa and Dar es To start with the main sea ports at Mombasa and Dar es Salaam as phase one and thereafter the main land Salaam as phase one and thereafter the main land borders into the EAC as phase two as transitional phases borders into the EAC as phase two as transitional phases where each Partner State would place its own officers at where each Partner State would place its own officers at the major points of entry. the major points of entry.

Proposed Trade Facilitation Proposed Trade Facilitation program for EAC countries program for EAC countries

Private sector view on One Stop Border Post Private sector view on One Stop Border Post One Stop Border Post is a good concept for EAC especially One Stop Border Post is a good concept for EAC especially

for internal borders.for internal borders. However, the measure should be transitional i.e. for However, the measure should be transitional i.e. for

period of time.period of time. Ultimately, one stop border post should be phased out for Ultimately, one stop border post should be phased out for

Internal borders. i.e. should be shifted to the Internal borders. i.e. should be shifted to the outer/external borders of EAC Partner States.outer/external borders of EAC Partner States.

This will facilitate free movement of goods in a single This will facilitate free movement of goods in a single Customs Territory.Customs Territory.

Other Trade Facilitation measures Other Trade Facilitation measures

Promotion the use of Authorised Economic Operators Promotion the use of Authorised Economic Operators scheme complemented with post clearance audit. It scheme complemented with post clearance audit. It requires all in the chain to participate in the scheme for requires all in the chain to participate in the scheme for full benefits. It is a challenge.full benefits. It is a challenge.

Mutual recognition of Authorized Economic Operators Mutual recognition of Authorized Economic Operators (AEO) scheme.(AEO) scheme.

Single window system for agencies working at the border. Single window system for agencies working at the border. Publication of the procedures to improve their Publication of the procedures to improve their

predictability . Not in routine orders only.predictability . Not in routine orders only. Simplification and harmonization of all procedures.Simplification and harmonization of all procedures. Automation and use of ICT for all agencies at the border.Automation and use of ICT for all agencies at the border.

Other Trade Facilitation measures Other Trade Facilitation measures

Ministries have established a national desk for timely Ministries have established a national desk for timely dissemination of information about EAC trade-facilitation dissemination of information about EAC trade-facilitation matters under EAC Ministries.matters under EAC Ministries.

Risk-based management approach.Risk-based management approach. Coordinated approach to Trade facilitation at the Coordinated approach to Trade facilitation at the

borders. borders. Building of border related infrastructure. Building of border related infrastructure. Proposal to have COMESA-SADC –EAC Free Trade Area Proposal to have COMESA-SADC –EAC Free Trade Area

(Tripartite)(Tripartite) Harmonization of Regulatory framework in the EAC. Harmonization of Regulatory framework in the EAC. Harmonization of axle load limits for the EAC region.Harmonization of axle load limits for the EAC region.

Thank you, Asante. Thank you, Asante.