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East African Customs Union Launched

Officials in Kenya, Tanzania, and Uganda simultaneously launched the East African Customs Union, which goes into effect Saturday. This program is expected to increase regional and global trade.

Kenyan assistant finance minister, Henry Obwacha, told reporters in Nairobi the tariff agreement among the three countries effectively establishes the area as a trading bloc that will improve the lives of people living there.

"We have pursued economic integration in order to attract investments and stimulate economic activity in our region," he said. "Through the East African Community, we seek to remove barriers to trade, facilitate movement of people, money, and capital."

The Customs Union sets up a single market of more than 90 million people with a combined gross domestic product of around $30 billion.

Mr. Obwacha said the individual economies of the three countries would grow because they will have access to this large market, will diversify their production and export bases, and can attract foreign investment.

Beginning Saturday, the three countries will not charge a tariff on imports of raw materials such as cotton, but will levy a 10 percent tariff on imports of semi-processed goods such as yarn and a 25 percent tariff on finished products like cloth.

The agreement applies to imports originating from outside of the East African Community.

In the long run, there will be no tariffs charged for goods originating from, and traded among, the three counties.

But for five years, Uganda and Tanzania will be able to charge an additional tax on Kenyan products because Kenya's manufacturing sector is more developed than those of its neighbors.

Assistant Minister Obwacha outlined the long-term vision of the East African Community, or EAC.

"As we integrate," he said, "we seek to narrow our political differences as we recognize that our cardinal responsibility as a community is to reduce poverty, increase employment opportunities for our people, uplift their standards of living, and indeed plans are at [an] advanced stage to ensure that the EAC becomes a common market with a single trade and investment area, followed by a monetary union and ultimately, a political federation."

The Customs Union is set to come into force Saturday, as outlined under the East African Customs Union Management Bill, passed earlier this month by the East African Legislative Assembly.

Officials in Tanzania and Uganda also held celebrations to launch the Customs Union.