Following the signing of the Common Market Protocol on 20 November 2009 by the EAC Heads of State, the East African Community Secretariat, as was expected has been inundated with calls from various quarters, investors, traders, transporters, and students among others, eager to know what the signing of the Protocol portends for them. The purpose of this note is to offer general information about the operationalisation of the EAC Common Market Protocol.
The mandate for the Partner States to negotiate the EAC Common Market is derived from Article 5(2) of the Treaty and more specifically from; Article 76(1) which states that “There shall be established a Common Market among the Partner States. Within the Common Market, and subject to the Protocol provided for in paragraph 4 of this Article, there shall be free movement of labour, goods, services, capital, and the right of establishment”; and, Article 76 (4) of the Treaty which states that “For purposes of this Article, the Partner States shall conclude a Protocol on a Common Market.”
Further, Article 104 (2) of the Treaty states that “For purposes of paragraph 1 of this Article, the Partner States agree to conclude a Protocol on the Free Movement of Persons, Labour, Services and Right of Establishment and Residence at a time to be determined by the Council.”
3.0 What is a Common Market
This is a merger/union of two or more territories to form one common territory in which there is free movement of goods, labour, services and capital. The basic elements of a common market are:
A smoothly functioning Customs Union including complete elimination of all tariff and non-tariff barriers plus a common external tariff
Free movement of persons, labour, services and right of establishment and residence
Free movement of capital within the Community
Enhanced macro-economic policy harmonisation and coordination particularly with regards to fiscal regimes and monetary policy
Setting up, strengthening and empowering the necessary Institutions/Organs supportive of the Common Market operations like the East African Court of Justice and the East African Legislative Assembly.
4.0 The EAC Common Market Protocol
Negotiations on the EAC Common Market Protocol commenced in February 2008 and were successfully concluded in September 2009 when the Multi Sectoral Council of Ministers adopted the Draft EAC Common Market Protocol and its annexes. The Draft was further considered for its legal content by the Attorneys General under the Sectoral Council on Legal and Judicial Affairs and approved in October 2009.
The Protocol was signed by the EAC Heads of State on 20th November 2009 at a colourful ceremony in Arusha, Tanzania. The Protocol will undergo the ratification process in the Partner States before entering into force on 1st July 2010.
The EAC Common Market Protocol, in accordance with the provisions of Articles 76 and 104 of the Treaty, provides for the following, to be progressively implemented:
(i) free movement of goods;
(ii) free movement of persons;
(iii) free movement of workers;
(iv) the right of establishment;
(v) the right of residence;
(vi) free movement of services; and
(vii) free movement of capital
In addition, the Protocol provides for cooperation in the following areas that are necessary for the effective functioning of the Common Market and maximising the benefits derived there from:
(i) protection of cross border investments
(ii) economic and financial sector policy coordination
(iii) competition and consumer welfare
(iv) commercial policy
(v) coordination of transport policies
(vi) harmonisation of social policies
(vii) environmental management
(ix) research and technological development
(x) intellectual property rights
(xi) industrial development; and
(xii) agriculture and food security
To give effect to the above freedoms and areas of cooperation, the Protocol has the following annexes which contain the implementation timeframe and operational details:
annex on the free movement of persons
annex on the free movement of workers
annex on the right of residence
annex on the right of establishment
schedule on the free movement of capital, and
schedule of commitments on trade in services in the Community
5.0 Current Status
The current status, therefore, is that the provisions of the Protocol are not effective until it is ratified by the five Partner States. In this context, the Protocol has been dispatched to the Partner States for ratification. After ratification, the Protocol is expected to enter into force on 1st July 2010.
The EAC Secretariat, in conjunction with the coordinating Ministries of EAC Affairs, intends to hold sensitisation workshops on the EAC Common Market Protocol for a wide range of stakeholders in all the Partner States beginning February 2010. In the meantime, a soft copy of the EAC Common Market Protocol and its annexes can be downloaded here.
In accordance with Article 76 (3) of the Treaty, a comprehensive study on the necessary institutional reforms of the Community is ongoing. An extra-ordinary meeting of the Council of Ministers is scheduled for end April 2010 to consider the institutional reforms and the budget necessary to implement the provisions of the Protocol.
The EAC Secretariat will keep the general public informed about the progress in terms of establishing the EAC Common Market.
A publication of the EAC Secretariat, Arusha, Tanzania, December 2009