Quantifying Tariff Barriers

Abstract

As the preceding two chapters discussed and quantified the NTBs impacting trade in the EAC, this chapter will discuss the impact of Uganda’s 10 per cent differential tariff on Category B1 products from Kenya under the EAC (an increase from the original 6.5 per cent COMESA tariff), using partial equilibrium analysis. The analysis focuses on two main objectives: firstly, to determine the impact of the change in tariffs on trade, welfare and revenue and secondly, to illustrate the influence of multiple RTA memberships (as a regional policy), the resultant effects of the tariff regime on the management of the customs union (rules of origin) and the infant industry protection policy.2 The results in this chapter should be seen from the context where Uganda traditionally had the lowest most favoured nation (MFN) tariffs in the region and, hence, the imposition of higher tariffs will have trade, revenue and welfare implications. The chapter firstly provides a brief description of Uganda’s tariff structure towards the EAC and Kenya, then reviews the tariff policy as specified in the treaty. The simulation results are then presented and a discussion concludes the chapter.