Non Tariff Measures on Goods Trade in the East African Community

WTO Consistency and Effective Monitoring

Content of the Presentation

• • • • • WB work on NTMs for the EAC Trade Restrictive Non-Tariff Measures (NTB) in the EAC Progress to date Lessons from the WTO and RECs Recommendations –WTO Compliance and Effective Monitoring System

WB work on NTMs for the EAC

• Two phases: (I) identification and prioritization of core NTMs; and (II) identify mechanism for elimination and monitoring • Phase 1, WB published report in 2008 and dissemination done at secretariat and capitals • Phase II on going, two draft reports: – Moving towards WTO consistency and designing effective monitoring mechanism – Specific case study on Diary industry in the EAC • Key advise: Eliminating WTO inconsistent NTMs will help further RI goal of the EAC (all are members of WTO), while linking elimination with broader EAC agenda

Non Tariff Barriers in the EAC

Current Situation – EAC identified 35 NTB for elimination (Dec 2008) – Categorized by political/economic complexity and trade importance – Direct link between the distance goods travel and increase in trade costs from NTB – Considerable body of research on NTB over the past five years

NTBs in EAC Cont…

• The 35 NTBs are categorized into 4 groups, which are then matched with WTO categories: A. Low complexity /impact with agreed procedures are for immediate elimination; B. Low complexity /impact but no procedures in place need up to 6 months; C. High complexity with high impact require political consensus for elimination 6 – 12 months D. High complexity with low impact, require political consensus and may take long to address;

Table 1. WTO Non-tariff Barriers: Classification of EAC NTM WTO Category

I Government Participation II Customs and Administrative Entry Procedures III Technical Barriers to Trade IV Sanitary and Phytosanitary Measures V Specific Limitations VI Charges on Imports VII Other NTBs (Business Licensing, Roadblocks)

NTMs notified to EAC Secretariat

1 12 4 5 2 11

A

7 1 3 2 6

B

4 1 1

C

1 2 1 2

D

1 2

Total

35 19 6 6

Source: Derived from Draft EAC Time-Bound Programme for Elimination of Identified Non-Tariff Barriers, EAC Secretariat, December 2008.

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However, the categorization has potential caveats:

• No working definition of the complexities • Assumes NTMs are classified correctly • Balancing legitimate public policy with regulatory concerns is not straightforward

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Progress to date

Despite numerous meetings, reports & dialogue, progress is modest!

• National Monitoring Committees established but not effective and face serious capacity challenges • Some progress on: – reducing # of road blocks – Publicizing NTBs based on studies by EABC – Utilizing the COMESA-SADC reporting • Most NTB identified and agreed for immediate removal in December 2008 remain in place

Lessons from the WTO & RECs

• • • • Establish Monitoring System to measure progress Ensure Effective dialogue (ASEAN) Link to regulatory reform and regulatory impact assessments (trade minimizing) Enforce compliance (EU)

But EAC faces some specific challenges:

• • • • Slow response times to complaints from members states due to capacity shortage Lack of evidence or scientific basis for some NTBs Commitment: Examining NTMs from national rather than regional perspective Secretariat lack enforcement powers over MCs

Recommendations –WTO Compliance and Effective Monitoring System

– Monitor progress through a Scoreboard and promote dialogue (national/regional and public/private) – Leverage dispute settlement system in addressing NTM issues – Implement National Level commitments to implement WTO core principles (transparency, non-discrimination and proportionality) to promote regional integration agenda – Leverage resources for NMCs to function effectively (TA, link NTM with Aid for Trade agenda)