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1. What is a Common Market? A Common Market is defined as a single economic space within which business and labour freely move and operate so as to stimulate greater productive efficiency, higher levels of domestic and foreign investment, increased employment and growth of intra and extra-regional trade, of the concerned countries.
It is essentially a customs union with common policies on product regulation and freedom of movement of all the three factors of production (land, capital and labour) and of enterprise. The goal in a Common Market is that movement of capital, labour, goods and services between the members is as easy as within them.
2. What are the objectives of the coming EA Common Market? The overall objective of the coming East African Common Market is to widen and deepen regional integration.
Specific objectives include: -
3. What are the Elements of the East African Common Market Protocol?
The EA Common Market shall be guided by the fundamental and operation principles and elements of the East African Community. These are categorised into the following five (5) freedoms and two (2) rights;
Freedoms
Rights
In the EA Common Market, any limitation on any of the above freedoms and rights will only be justified on grounds of public policy, public security and public health. Short of that, all nationals of the five East African countries will be given equal treatment as the nationals of the respective EAC Countries they will enter or operate in.
4. Has the EA Common Market Started Operating? The EA Common Market has not yet started operating. Partner States are at present completing the negotiation of the Common Market Protocol and its Rules and Regulations. The Protocol is to be signed in November 2009, and its implementation to commence in January 2010.
5. Are There Other Common Markets else Where in the World? Yes there are other common markets else where in the world. Examples include;
Examples of Proposed Common Markets
6. What is the Legal Basis for the EA Common Market?
The EAC Treaty is the legal basis for the EA Common Market. According to Article 2 of the Treaty, the Common Market is the next step following the successful establishment of the EAC Customs Union. The Treaty, which entered into force on 7th July 2000, calls for the establishment of a Customs Union (2005), a Common Market (2010), a Monetary Union (2012) and ultimately a Political Federation, as the cardinal stages for EAC integration.
The Customs Union has been operational since 1st January 2005, and the Protocol for the Establishment of the East African Community Common Market is expected to come into force in January 2010.
7. What are the Key Broad Areas of Intervention Under the EA Common Market?
The Key broad intervention areas are; Social Policy, Economic and Infrastructure Policy, Regional Public Good and Governance. Under these four areas, the EA Common Market hopes to tackle the following;
Social Policy This generally covers poverty reduction, rights of workers, security, cultural diversity, social and territorial cohesion and gender.
Economic and Infrastructure Policy This addresses trade, investment, standardisation, statistics, public procurement, anti competition rules and regulations, transport and communication policy, and the management of transport and communication channels and modes.
Regional Public Good This addresses the environment, natural resources, tourism, the management of communicable and opportunistic diseases in both human and animal and research and technology.
Governance This deals with the legal and regulatory framework of the EAC, capacity development, gender, human Rights and civic education.
8. What is the Difference Between a Common Market and a Customs Union?
As opposed to a Common Market, a Customs Union is the stage where two or more countries agree to remove any trade barriers that may exist among them and to reduce or eliminate customs duties on mutual trade, while maintaining a common external tariff for all other third countries. In most instances, it is the stage of integration that precedes the common market.
The EAC Customs Union maintains a three band Common External Tariff of zero, ten and twenty five depending on the commodities for the trade originating from other countries that are not the Partner States and will have zero tariff for the trade belonging to the five Partner States starting in 2010.
9. Who was Responsible for Negotiating the EA Common Market Protocol?
The EAC Council of Ministers approved a framework for the negotiations. This consists of Multi-Sectoral Committees of Permanent Secretaries and Ministers and a High Level Task Force (HLTF) from each Partner State. The Uganda HLTF coordinated by the Ministry of East African Community Affairs comprises of high level officials from the following ministries and institutions:-
10. How was the EA Common Market Protocol Negotiated?
Every Individual Partner State was required to have a High Level Task Force (HLTF) which merged into the EAC HLTF that conducted the negotiations. The EAC HLTF went through 12 rounds of negotiations. Each State HLTF carried out its own country consultations on the issues to be tabled and negotiated, and this formed the basis of the individual country positions. These would then be pushed for by the individual country HLTF during the negotiation rounds, until an agreed upon position for all five countries was reached. The venues for the negotiations rotated within all the Partner States.
11. How will the EA Common Market be implemented?
The implementation of the EA Common Market will be carried out in a systematic manner with the EAC Treaty and the Common Market Protocol as the guiding documents and operationalization done through the Rules and Regulations of the Protocol. For example;
Many more Regulations are provided for as annexures in the Protocol and they are deemed part and parcel of the Protocol.
12. What Exactly is Entailed in the EA Common Market Protocol? The EA Common Market Protocol contains Articles and Provisions that deal with the following major areas.
13. What are Going to be the Opportunities of the Common Market?
The EA Common Market is going to provide enormous opportunity to those ready to take advantage of it. This includes but is not limited to the following:-
Consumers:
Businesses:
Countries as a whole: Qualitative analysis suggests that;
14. What are the Challenges of the Common Market? There is always two sides to the coin. Like every good thing, businesses, states and individuals must appreciate the challenges of the common market so as to better prepare for it, and thus harness its benefits effectively.
15. What Benefits is Uganda going to Obtain From the Entire Regional Integration Process?
In addition to the objectives and benefits of the Common Market already stated, the integration as a whole shall and has already realised some of the following benefits:
Tourism Sector The EAC Partner States have agreed among themselves to market EAC as a single tourist destination in order to maximize the benefits of tourism and wildlife. Uganda will thus compete and cooperate with the other Partner States to bring out efficiency in the tourism services. Public Tourist sites and accommodation facilities in Uganda and other Partner States have introduced rates for East Africans.
Increased Market Access The EAC provides a larger population of about 130 million people and more varied resources. Local and international investors will be attracted to the region because of the bigger internal market, improved peace and security, and reduced costs of production accruing from the free movement of factors of production under the Common Market.
Increased Intra Regional Trade In 2007, total intra-EAC trade increased by 22.0% from USD 1342.6 million in 2005 to USD 1,973.2 million in 2007 following the increase in both intra-EAC imports and exports during the year compared to the previous year.
Increased Tax Collection There has been increased tax collection due to enhanced administrative efficiencies in URA and through exchange of information and joint programmes among the regional tax bodies. Taxes increased from 682.07 billions of shillings in 2006 to 919.14 billions in 2007.
Increased Efficient Production The Common Market will provide full freedoms of movement of the factors of production across Partner States. Production will become more efficient increasing productivity. Efficient firms shall benefit from the economies of scale which will increase profit margins. East Africans will in turn have a chance to enjoy high quality cheap goods and services and also move and establish easily in other Partner States for economic purposes.
A Single Currency The prospects of a shared common currency by 2012 under the Monetary Union will benefit people of the region since they will not experience foreign exchange losses that they are incurring today when they move from one country to another. Single Boarder Clearance Desk Effort has also been made to create a single boarder clearance desk at each border crossing. So far, the clearance of the train services is undertaken at just a single side of the border. Arrangements are also in place to cover all border services with a view to having a single boarder crossing arrangement for all goods, services, and people. Boarders are now open 24 hours a day for all the posts that require such a service. The number of night road blocks has been reduced and they target specific trucks with queries which are resolved expeditiously.
Harmonization of Standards Harmonization of standards for goods produced in East Africa. So far, most standards have been harmonized to eliminate the technical barriers due to divergent regulations amongst the Partner States and build confidence in goods traded with the EAC in the international arena.
Improved Bargaining Power as a bloc Uganda is negotiating the EAC –European Union Economic Partnership Agreement (EAC – EU EPA). This EPA presents EAC/Uganda with immense trade opportunities with the biggest trading bloc in the world and enables her to consolidate her own regional integration efforts.
The East African Passport Establishment of the East African Passport and special immigration counters for East Africans, harmonized immigration forms, abolition of student visas for East Africans, harmonized procedures for issuing work permits, implementation of EAC University student exchange programmes is ongoing.
Cooperation in the Education Sector Under the Education sub-sector there has been development of the EAC Anthem, establishment of the EAC Kiswahili Commission, EAC student Essay competitions, formation of the East African Culture and Sports Council.
Agricultural Sector In the agricultural sector, the development of a Regional Sanitary and Phytosanitary Protocol that seeks to promote food safety among humans, protect animals including fish and crops against disease and disease causing organisms is in advanced stages.
The Health Sector Plans are underway to establish the National Medicine and Food Safety regulatory authority and Uganda is lobbying to host the East African Health Research Commission in Entebbe.
The Civil Aviation Sub Sector Uganda will be the headquarters of the Civil Aviation Safety and Security Oversight Agency (CASSOA). This regional institution will harmonize civil aviation regulations in the region.
Environment Sub Sector As regards to the environment, a Regional Protocol on Environment and Natural Resources Management is awaiting ratification by Partner States. The Protocol seeks to conserve biological diversity and mitigate the effects of climate change among others. The EAC region now has a better management of shared resources, for example Lake Victoria, including combating insecurity on Lake Victoria through Lake Victoria Basin Commission.
16. How will the Disparities in the Different Economies be Handled?
The disparities in the different economies will be addressed by the provisions on Competition Policy that are enshrined in the Common Market Protocol. They will also be addressed by the Development Fund that will address some of the resource constraints of the Partner States by assisting in mobilising resources for the implementation of the EAC Treaty objectives alongside with ensuring that the Partner States with special development needs have access to structural adjustment support.
17. How should the Ugandan Economy prepare for the EA Common Market?
18. What are the Next Steps After the EA Common Market?
The next step after the coming into force and implementation of the EA Common Market is the full blown negotiations for the establishment of a Monetary Union by 2012 and thereafter the achievement of an ultimate Political Union/ Federation. Studies on the Monetary Union have already been commenced by the Central Banks of the five different Partner States.
19. Where can I get more Information on the EA Common Market? Further information on the EA Common Market can be obtained from: The Permanent Secretary Email : This e-mail address is being protected from spambots. You need JavaScript enabled to view it , Website : www.meaca.go.ug |