Trade Disputes: East Africa Gets New Ombudsman

East Africa now has a new arbiter for resoving regional trade disputes with powers to investigate and address unfair trade practices and subsidies.

Set to commence operation at the end of this year, East Africa Community (EAC) Secretary- General Peter Mathuki said the Trade Remedies Committee (TRC) will assist businesses in the bloc’s five-member States when they have concerns over unfair trade deals from foreign rivals.

In recent times,disagreements among member States have almost paralysed trade and led to huge losses for traders.

Uganda recently protested a 79% cut on its scheduled sugar exports to Kenya, reigniting trade disputes between the two neighbouring states.

Mathuki said “We are in the process of setting up the Trade Remedies Committee to deal with matters including rules of origin, anti-dumping measures and subsidies. It is our hope that it will be in place before the end of the year.”

For instance, the committee will investigate an unexpected surge in imports of a particular product and take steps to prevent harm to domestic industry by imposing temporary safeguard measures.

Entrepreneurs may also complain to the team about competition from imports, which are unfairly subsidised by foreign governments, or about the ‘dumping’ of goods in the EAC markets.

Dumping happens when products are sold below their usual price in the exporting country.

Experts warned that the delay of the EAC to effect the TRC was negatively impacting the business community, prolonging resolution of trade disputes and impacting on intra EAC trade.

The TRC will investigate complaints and make recommendations to government ministers for corrective anti-subsidy or anti-dumping measures that could be imposed to address any injury caused to the domestic industry in question.

According to the EAC Trade and Investment Report 2016, intra- EAC exports declined from $3.2 billion in 2015 to $2.6 billion in 2016 representing 17.4 percent drop due to inadequate trading regime which restricts the export of certain commodities to partner states.

The existence of non-tariff barriers
and lack of product diversification have, among other factors continued to affect intra-regional trade.

The new authority fast-track dispute resolution and support smooth trade in the EAC trading bloc.

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