DS SEMINAR QN NO 9 ANSWERS(CUSTOM UNION & FREE TRADE

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 Custom union, refers to the intergration in the members set the common tariffs against the non-members 0nly the participants members set the common external policies.this is the second stage of the classical theory of custom union  which maintain that region intergration move in stage from the low (free trade ) to deep(political federation) , the good example of custom union in the world is european economic community but the East Africa community also considered as the custom union which consist of numbers of members as Tanzania, Kenya, Uganda, Rwanda, Burundi, South sudan. most purpose of custom union is to make easier member countries to trade freely with others within the custom with different advantages as increase of trade flows and economic diversification reduces the trade  deflection but also the custom union has some negatives as loss of economic sovereignty where non-tariff trade barries are the obstacles that hinders the development of free trade among the custom the reasons why barriers includes to safeguard the healthy safety, and secure human being ,to protect home industries also protect the revenue loss 

The following are some of non-tariffs trade barriers;

Corruption, this henders the development of non-tariff trade as in East Africa community example Walker odiambo(2009)the recent Transparent internation survey on corrupton shows that among oforigin member state of East Africa authorites  with high cases of are police officers, revenue authorities , as in vehicles inspection as the results to poor develoment of the freee trade in EAC members.

Differences in business registration and licensing,the varriation in business registraion procedures and lack of prefences treatment toEAC originating business dificults which makes board registration of business a difficult process,cumbersome and expensive manual process used in business names search, registration and payment of relevant charges multiplicity of licences used in production and distribution and sales of goods resulting to duplication and increase of cost of doing business in the same registration and licencing procedures hinders the development of free trade in East Africa community.

Varriation trade reguration among the members states,this includes the different specific maximum gross vehicles and also the varriation in the parameters oon weight labelling and qualities tolerances in measurements and technologies used in packing of goods to cross boarders this also influences the failures of development of t non-tariff trade in EAC , so should set up the same reguiation so as to easily for development of state among the members states.

Polices road blocks,this involves the polices officers stopping  the commercial vehicles to cross border from different countries in which this hinders the coorpation in  the trading system examples the blocking the Namanga border in which the commercial vehicles failed to cross the border  from Tanzania to Kenya but where no sufficient proof that good being transported also also the police roard block influences  the increase of corruption in order to transport their goods.


Cumbersome in custom and administrative procedures, this includes varying system for import declaration  and payment of applicable duty rates limited custom working hours varying interpretation of rules origin application of discriminatory taxes and other charges  on EAC originating imports cumbersome procedures of verifying contained import unfair competition from counterfeit product and diversion of transit goods into the region so this varriation in customs and instructive systen among the EAC  hinders the development of free trade in the community.


Poor implementation of policy and laws,  in the custom union the lack of the initiatives influences  the failure of the development of the trade examples the poor implementation of laws like implementation of changing the relation with European union through Economic parternity agreement  among the custom members ,so the failures of implementation influences the poor development of free trade among the members of the community so inorder to develop thefree trade must be the implementation of the policy and laws  initiated by members.


generally,inorder for the EAC members to overcome and develop free trade they should improve the following , improvement of infrastructures system as railways ,ports,communication system , provision of education  to the business makers over the crossing border requirement and solving of the problem facing them ,implementing the informal trade is seen to have occupied a greater share of the regional trade hence East Africa community can see on how to harmornize prevailing domestic taxes system laws and procedures so as to reduces difficults in trading.

                   

                REFERENCES

Flora mndeme(2004),regional intergration in Africa:A closer look at the EAC African.

A.Mkungu (2014)regional intergration and policy challenges in Africa.

L.Alan Winter (2003),regional intergration development.

Samuel Ojo Oloruntoba(2020), pan Africanism ,Regional intergration deveopment in Africa.



  

Maoni

Chapisha Maoni

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