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The East African Community (EAC) has declined a proposal from South Africa seeking to sell its motor vehicles within the region duty-free.
The EAC maintains that such products, along with textiles and apparel, must remain subject to the 35 percent tariff imposed on goods produced outside the bloc.
This decision continues a long-running dispute that dates back nearly a decade. South Africa initially made a similar request nine years ago, but the proposal was rejected. The issue could gain new urgency with the establishment of the Tripartite Free Trade Area (TFTA), which integrates the EAC, the Southern African Development Community (SADC), and the Common Market for Eastern and Southern Africa (Comesa).
Josiah Rotich, Kenya’s Director of External Trade at the State Department for Trade, confirmed the EAC’s decision to safeguard its automotive industry. “Tariff offers have been agreed upon, but automotive products are not part of the liberalization plan,” he explained in a brief statement to The EastAfrican.
The TFTA framework requires member states to exchange tariff concessions based on the principle of reciprocity. However, sources close to the negotiations revealed that South Africa’s trade representatives failed to attend a crucial meeting scheduled for December 2023, further complicating efforts to finalize an agreement.
South Africa’s renewed push has highlighted the EAC’s commitment to protecting its domestic industries and promoting regional self-reliance. Officials have expressed concerns that duty-free vehicle imports could undermine local automotive manufacturing efforts and lead to unfavorable competition.
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The absence of South African representatives in recent discussions has added tension to the negotiations, raising questions about the effectiveness of the TFTA in fostering balanced trade relationships.
The EAC’s decision reflects a delicate balancing act between advancing regional integration and safeguarding its economic interests. While the TFTA aims to create a broader free trade area across three major regional blocs, the EAC remains focused on ensuring that such agreements do not come at the expense of its member states’ long-term economic growth.
