South Sudan and Somalia penalized for delaying key trade deal

South Sudan and Somalia have been blamed for delays in the implementation of two key trade agreements in the region, with private sector lobby groups urging the East African Community (EAC) to speed up implementation of the agreements.

The two countries have yet to sign or ratify the Tripartite Free Trade Area (TFTA).

The trade agreement links the East African Community economies to different trading blocs to which various partner countries on the continent belong.

These organizations are the Common Market for Eastern and Southern Africa (Comesa) and the Southern African Development Community (SADC).

Kenya, Rwanda, Burundi, Somalia, the Democratic Republic of the Congo and Uganda are members of COMESA, while Tanzania belongs to the Southern African Development Community. The Republic of Congo belongs to For both trading groups.

The TFTA aims to reconcile these differences to promote trade among EAC countries as well as the other two trading blocs.

The TFTA and the African Continental Free Trade Area (AfCFTA) are two key trade agreements in the region, but South Sudan has yet to ratify them.

Economic Group

The TFTA was born out of the fact that the EAC partner countries trade more with COMESA and SADC than with other African countries.

To further promote trade, the three major economic blocs of COMESA, the East African Community and the Southern African Development Community agreed to establish the TFTA.

“However, the TFTA agreement is yet to come into force due to the low number of ratifications,” noted the East African Business Council (EABC), a private sector lobby group in the region, to which Kenya is a member through lobby groups such as the Kenya Private Sector Alliance (Kepsa) and the Kenya Manufacturers Association.

So far, 11 countries have ratified the agreement and 23 countries have signed it.

Six countries are yet to sign. “In the East African Community, Tanzania has yet to ratify, while South Sudan and Somalia have neither signed nor ratified the agreement. In addition, Tanzania and Egypt are yet to finalise bilateral tariff offers, while the East African Community – Burundi, Rwanda, Uganda and Kenya and the Southern African Customs Union (SACU) – Botswana, Swaziland, Lesotho, Namibia and South Africa are yet to finalise bilateral tariff offers,” the East African Agricultural Bank said in its policy priorities for the 2024-25 fiscal year.

The EABC also pointed out the challenges in implementing the African Continental Free Trade Area, the continent’s largest trade agreement, with Kenya shipping tea to Ghana for the first time.

“Challenges include the delay in signing the agreement by the Republic of South Sudan and the non-implementation of the East African Community’s common external tariff and liberalisation of trade in services,” the East African Business Council said.

The DRC also allegedly submitted a separate tariff offer that differed from that of the East African Community.

Partner countries also take It took too long for the two sides to reach a common position on the controversial issues of rules of origin in the African Continental Free Trade Area and the treatment of products produced in export processing zones.

EABC noted that South Sudan is currently in the process of ratifying the African Continental Free Trade Agreement.

“The EAC partner countries and the Secretariat should urge the Republic of South Sudan to ratify the African Continental Free Trade Agreement and implement the EAC Common External Tariff and the EAC’s committed timetable for the progressive liberalization of trade in services,” the EAC said.

The lobby group pointed out that the tariff model requires that East African Community sensitive goods (category B) account for 7% of the 5,688 tariff lines, or 393 items, to be liberalized within 13 years.

Tariff Details

The East African Community partner countries have 348 Significant progress has been made on the tariff issue String.

Category C excluded goods account for 3% of the 5,688 tariff lines and must meet the anti-concentration clause, which means that no more than 10% of intra-African imports are excluded from preferential treatment.

To date, the East African Community has reached 84 tariff agreements.

“The last Permanent Secretary meeting was held from January 29 to February 1, 2024, which directed that: i) Partner countries should complete national consultations on pending tariff items based on agreed criteria by March 31, 2024; and ii) The Secretariat should convene a meeting of experts and Permanent Secretaries by April 30, 2024 to finalize the B and C tariff categories for the East African Community,” the East African Community Commerce Policy Priorities document reads.