The East African Community (EAC) has been touted as one of the most integrated Regional Economic Communities in Africa. This integration under the EAC treaty law extends to certain aspects of customs management and in particular trade remedies. Accordingly, all the EAC countries are expected to have uniform trade remedies.
However, Kenya’s Trade Remedies law ,Trade Remedies Act, seems to overlook these integration efforts. This can be deduced from what the Act considers a “domestic market” under section 2.Under the Act, domestic market is defined as the market within the country including the EAC as a single customs territory. The question that needs addressing is whether the Act envisages intra- EAC trade remedies investigations, enforcement and measures. It should be remembered that this is the first proper legislation in Trade Remedies the EAC region.
Article 75 The EAC Treaty expects Partner States to formulate a protocol to address dumping as well as subsidies and countervailing measures. As regards safeguards, the Partner States are further supposed to inform other partner states before taking safeguard measures. In fact, the Council of Ministers of the Community have the mandate to “ examine the method and effect of the application of existing safeguard measures and take decisions thereon”.
Bearing in mind the above, the question becomes, can a Partner State such as Kenya implement a safeguard measure without the blessing of the of the Council? And if not, does the Kenya Trade Remedies Act advance the objects of the Treaty given it does not provide for consultative approach?
The Kenya law has several provisions whose interpretation simply means that the EAC Partner states are to be treated just like any other country outside the EAC in the investigation of dumping and enforcement of anti-dumping duties as well as during investigation subsidies and enforcement of countervailing duties. For instance, the Act describes and interested party as “ a producer or trade of business association , a majority of the members of whom produce the like product in Kenya”; the Kenya Trade Remedies Agency is given the power “to investigate and evaluate requests for application of safeguard measures of any product imported in Kenya”
On dumping and Countervailing measures, the Act states that “where a product is being imported in Kenya in such increased quantities and under such conditions as to cause or threaten to cause a serious injury to a domestic industry…”
Further the Act states that “ an application for the conduct of the investigations or evaluation of the alleged dumping or subsidized exports in Kenya shall be carried out in accordance with the procedure set out in the Second Schedule”
From the above , it is clear that the Act is inward looking, and therefore all the other EAC Partner States are to be treated any less different for non EAC countries. This goes against the spirit of the EAC whose pillars include, among others, a Customs Union.
The EAC Customs Union Protocol, which implements Article 75 of the Treaty, deals with trade related aspect of the community including dumping , subsidies as well as safeguard measures. Article 1 of the Protocol, in defining dumping, seems to consider EAC as one market. It is noteworthy that the Protocol in Article 20 envisages cooperation in investigation of dumping , subsidies and application of Safeguard measures. It further provides in Article 16 that Anti-Dumping Measures, Countervailing measures and safeguard measures are to be implemented according to the relevant regulations.
The EAC Customs Union (Anti-Dumping Measures) Regulations aim at implementing of Article 16 of the Customs Union Protocol and to ensure “uniformity among Partner States in the application of anti-dumping measures and that to the extent possible, the process is transparent, accountable, fair, predictable and consistent with the provisions of the Protocol.”
The regulations define dumping as the situation where the export price of goods imported or intended to be imported into the Community is less than the normal value of like goods in the market of a country of origin as determined in accordance with the provisions of these Regulations and “dumped product” has the corresponding meaning.
More importantly,in all the regulations (on dumping, subsidies and safeguards) the investigating authority is defined as the authority charged with the responsibility of conducting anti-dumping investigations in a Partner State on behalf of the Committee for purposes of these Regulations.
The import of this is simply that under in the EAC, these national investigation authorities should commence these investigations for and on behalf of the [region wide] committee. In short, they should , during their investigations, treat the East African Community as one market. Yet the Kenya ‘s Act does the opposite i.e. it creates an investigating agency that supposedly will not differentiate an EAC member from other countries during investigation and eventually implementation of trade remedy measures. This is a clear contradiction of the position the Customs Union Protocol and indeed the EAC Treaty envisages. This needs an urgent addressing as tensions are likely as Kenya and its agencies such as KETRA and (KRA) begin implementing this legislation. An evaluation of the above will create harmony in the EAC and also help prevent litigation. It is worth noting the EAC is currently taking steps toward establishing a regional EAC Trade Remedies regimes in line with the EAC Treaty. This will be an important step in creating this much needed harmony in trade remedies in the region. This development will be discussed here in the coming days.
Patrick's Trade Digest 