Trade Facilitation in EAC Customs Union: Its Achievement and Implementation in Tanzania

Abstract

This study addresses trade facilitation in the East African Community Customs Union (EAC CU) by tracking the achievements and implementation using Tanzania as a case. The study uses descriptive research design and data for the study were mainly secondary data; unstructured interviews with key stakeholders complemented data for this study. The study found that as a result of implementation of trade facilitation initiatives, performance in trade, FDI inflows and trade taxes collection in all EAC countries have improved significantly. Tanzania performs better than other EAC countries in FDI inflows and contribution of export to the Gross Domestic Product (GDP). The study found a significant positive relationship between countries’ trade facilitation and export performance. Facilitation was found to have no significant relationship on FDI flows. The major setbacks of trade facilitation are non-tariff barriers, transport infrastructure, inadequate human resources capacity, and low level of automation. Addressing these challenges will enhance EAC countries benefits from trade.

Keywords: trade facilitation performance, trade facilitation and logistics indicators, EAC Customs Union