The East African Community (EAC) partner states and the Southern African Customs Union (SACU) have failed to reach a deal on taxing sensitive items such as motor vehicles and dairy products under the Tripartite Free Trade Area (TFTA) framework, pushing discussions to December this year.
The EAC comprises six countries-Uganda, Kenya, Tanzania, Rwanda, Burundi and South Sudan while SACU comprises five countries — South Africa, Botswana, Lesotho, Namibia, and Swaziland.
The member countries could not reach a consensus at a tripartite Council of Ministers meeting in Cape Town on June 18 and suspended negotiations to allow more time for consultation with stakeholders, said a Ugandan delegate that attended the negotiations.
But the two sides have agreed to immediately liberalize 66-67 percent of the items and to move to about 90 percent in five years, he said.
He said the negotiations on motor vehicles and dairy taxes were postponed to allow members consult their respective private sectors.
The EAC is coy to open up its motor vehicles market to imports from SACU, to protect the Kenyan and Rwandan assembly plants, while SACU, which is largely controlled by South Africa, one of the top two African economies wants to export vehicles to the EAC.