Overview:
East Africa is 95% of the way to a duty-free single market — but a stubborn 5% covering textiles, cars, spices and hides is holding up the deal. Here's what the new EAC Rules of Origin mean for Uganda's traders and manufacturers
The East African Community has agreed on 95 per cent of its revised Rules of Origin, a step towards a fully integrated, duty-free single market across the eight-nation bloc — but the final five per cent remains locked in disagreement, threatening to hold up the deal.
According to the Sectoral Council on Trade, Industry, Finance and Investments (SCTIFI), partner states remain divided over how to classify goods from sensitive sectors, among them spices, motor vehicles, textiles (yarn and cotton threads), apparel and clothing accessories, and hides and skins.
For Uganda’s manufacturers and cross-border traders — many of whom move goods through busy frontier posts such as Busia — the Rules of Origin matter because they decide which products cross regional borders duty-free and which are treated as imports from outside the bloc. The rules are the criteria used to separate goods produced within the EAC Customs Territory, which qualify for preferential tariff treatment, from those produced outside it, which attract duties under the Common External Tariff (CET).
The Council said all of the general provisions and more than 95 per cent of the product-specific rules had been agreed. For the products on which no consensus was reached, the currently applicable rules were maintained pending further study.
SCTIFI said the outstanding lines require further evidence-based analysis of regional production capacity, the availability and competitiveness of inputs, industrial demand, trade flows, import dependency, investment potential, job creation and value-addition opportunities before a decision can be taken.
The decisions were made at the Council’s meeting in Arusha from 29 May to 4 June. The Council adopted the revised rules, incorporating the agreed amendments to the Protocol on the Establishment of the EAC Customs Union, and referred them to the Sectoral Council on Legal and Judicial Affairs (SCLJA) for legal review. It also directed the EAC Secretariat and partner states to carry out targeted sectoral studies of the outstanding products.
To qualify as EAC-originating, goods must be either wholly produced in the region or sufficiently processed within it using materials imported from outside the bloc under the duty remission scheme, the Council said. Materials from third countries are treated as non-originating.
Under the protocol, goods made with duty-waived inputs must be sold outside the EAC. If they are sold within the bloc, they attract duties, levies and other charges under the CET, and such domestic sales are capped at 20 per cent of a company’s annual production.
Under the four-band CET, finished imports from outside the bloc attract a 35 per cent duty; intermediate products available in the region, 25 per cent; intermediate products not available in the region, 10 per cent; and raw materials and capital goods, zero.
The review was prompted by concerns from the business community that the 2015 rules, unchanged for more than a decade, had failed to keep pace with newer trade arrangements such as the African Continental Free Trade Area (AfCFTA) and the Tripartite Free Trade Area (TFTA).
At a November 2024 meeting in Arusha, the Council recommended a full review rather than piecemeal changes to contentious products such as refined sugar for industrial use. In August 2024, Kenya wrote to the EAC Secretariat proposing the comprehensive review, together with a proposal to import raw sugar for the manufacture of industrial sugar — sugar being among the goods the Council itself describes as contentious within the bloc.
The 2016 Council had directed that the Rules of Origin review follow completion of the CET review. The revised four-band CET took effect on 1 July 2022.