EAC ombudsman to iron out business disputes

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Economy

EAC ombudsman to iron out business disputes


EAC flags. PHOTO FILE | NMG

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Summary

  • A new regulator or ombudsman for regional trade disputes, with powers to investigate and deal with unfair trade practices and subsidies, will begin operating at the end of this year.
  • East African Community (EAC) Secretary-General Peter Mathuki says the Trade Remedies Committee (TRC) will help companies in the five member states of the bloc when they are concerned about trade deals unfair foreign rivals.
  • In recent times, quarrels between member states have almost paralyzed trade and resulted in huge losses for traders.

A new regulator or ombudsman for regional trade disputes, with powers to investigate and deal with unfair trade practices and subsidies, will begin operating at the end of this year.

East African Community (EAC) Secretary-General Peter Mathuki says the Trade Remedies Committee (TRC) will help companies in the five member states of the bloc when they are concerned about trade deals unfair foreign rivals.

In recent times, quarrels between member states have almost paralyzed trade and resulted in huge losses for traders.

“We are in the process of setting up the Trade Remedies Committee to deal with issues such as rules of origin, anti-dumping and subsidies. We hope it will be in place before the end of the year, ”said Mathuki.

The committee will, for example, investigate an unexpected increase in imports of a particular product and take action to avoid harming the domestic industry by imposing temporary safeguard measures.

Companies can also complain to the team about import competition, which is unfairly subsidized by foreign governments, or the “dumping” of goods into EAC markets.

Dumping is the case where the goods are sold at a price lower than their usual price in the exporting country.

Experts had warned that the EAC’s delay in performing the TRC was negatively affecting the business community, prolonging the resolution of trade disputes and affecting intra-EAC trade.

TRC will investigate any complaints and make recommendations to government ministers for any anti-subsidy or anti-dumping remedies that may be imposed to remedy any injury to the domestic industry in question.

According to the EAC Trade and Investment Report 2016, intra-EAC exports fell from $ 3.2 billion in 2015 to $ 2.6 billion in 2016, a decrease of 17.4% due to an inadequate trade regime which restricts the export of certain commodities to partner states.

Lack of product diversification and the existence of non-tariff barriers also continued to affect intraregional trade, among other factors.

The new authority is therefore seen as a welcome boost for regional businesses to speed up dispute resolution and support the smooth running of trade in the EAC trade bloc.

In the latest outbreak of a trade feud involving EAC member states, Uganda recently protested a 79 percent cut in its scheduled sugar exports to Kenya, reigniting trade disputes between the two neighboring states .

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