Article by: Assoc. Prof. Norman Mugarura (PhD).
The Author is an Associate Professor at the Faculty of Law, Bishop Stuart University and Kampala International University;
An International Financial Law expert at Kagera Advocates, Kampala, Uganda;
A Member of the Strategic Hub on Organized Crimes (SHOC), RUSI Group, London and a columnist in the New Vision.
When one talks of markets what pops to mind is either global market initiatives such as the World Trade Organisation (WTO) or regional market initiatives such as the East African Community or the European Union. States have concluded agreements with each other on trade and other development initiatives and some of these are in the form of regional trade agreements and others have a global dimension.
These agreements create mechanisms for preferential treatment among trading partners such as non-reciprocal preferential trade agreements, free trade agreements, movement of workers, customs unions, common markets, monetary union and political union’ which may not necessarily be available to non-member countries. In addition to the ‘East African Community (EAC), other market initiatives in Africa include the Southern African Development Community (SADC), Economic Community of West African States (ECOWAS), Arab Maghreb Union (UMA) and Common Market for Eastern and Southern Africa (COMESA).
In Europe there is the European Union is comprised of 27 member countries (after the exit of UK), in the USA, there is a reciprocal trade arrangement between Canada and Mexico through the conclusion of National American Free Trade Agreement (“NAFTA”). In Southeast Asia, there is ‘Association of Southeast Asian Nations (ASEAN) was established on 8 August 1967 in Bangkok, Thailand comprising 10 member States’. It must be pointed out that these markets were established as an expression for countries to coalesce on the common interests of states and taking collective action’.
States accede to regional markets after evaluating the cost-benefits and finding it is the right thing to do. They need each other for trade, to pursue other development initiatives and dealing with overlapping global challenges such as environmental protection and fighting cross border crimes. Global challenges need global solutions and for this reason, states have come together to pursue their common development initiatives.
Once states have joined regional markets, states must be clear minded and cannot afford to be ambivalent in the application of engendered market rules to govern those markets. Kenya and Tanzania and recently South Sudan have banned imported maize from Uganda, apparently alleging high levels of aflatoxins. Aflatoxins are class of compounds produced by certain moulds, which when consumed in large numbers can cause cancer of the liver.
However, for the claim of high levels of aflatoxins to be credible, there must be scientific evidence confirming that the level of aflatoxins is more than 20 parts per billion to compromise human health and safety. Some of the allegations though established have not been found to be credible and therefore fall within acceptable deliminimus rule of less than 5 percent.
Countries cannot commit to open their markets and then discriminate against goods from neighboring countries from entering their markets. According to the East African Community (EAC) common market protocol, so long as the goods in question have been produced in any EAC country, they can enter other countries markets without being discriminated against. States have shown less zeal in the implementation of engendered provisions of the Common Market Protocol adopted to streamline the relationship between EAC member countries.
The pace at which governing laws are being implemented is appallingly slow and has as a result delayed the effective integration of EAC markets. Tanzania has for instance refused to grant working permits to workers from Uganda and Kenya. States cannot afford to be ambivalent, on one hand committing to open markets and concluding agreements through which to do so and on the other erecting barriers to deny market access to goods from neighboring member states.
It is worth noting that markets cannot effectively work without doing so through established institutions. Institutions should work closely with national governments to ensure that desired market rules on trade, environment, cross-border and desired policy changes are implemented. I think things start spinning off when states hijack the mandate and do the work of established institutions.
The European Union has been successful in fostering desired policy changes across its member states using its four functional institutions—the Council, the Commission, the Parliament and the European Court of Justice (ECJ). In many glaring controversies relating to the functioning of the EAC, institutions have been either quiet or less active.
The role of institutions in fostering desired harmony between different market players is important and cannot be underestimated.