Non-Tariff Barriers to Trade in East Africa Community: A Case of Exporters in Kenya

A Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Masters in Business Administration (MBA)The purpose of the study was to investigate the effects of non-tariff and technical barriers to trade on the Kenyan exporters within the East African Community. The study was guided by the following research questions: What are the non-tariff barriers faced by Kenyan exporters within the East African Community? What are the technical barriers to trade affecting the Kenyan exporters within East African Community? What are the mitigating factors on non-tariff barriers and technical barriers to trade? The study adopted an explanatory research design to explain the various technical and non-tariff trade barriers that hinder trade within EAC within particular emphasis on barriers that hindered Kenyan exporters in EAC. The population of the study included all exporters in Kenya who were 9,585. The Yamane‘s formula was used to determine the sample size from population within each stratum and this brought the sample size to 121 respondents. Questionnaires were the main data collection instrument that were used by the researcher. Descriptive analysis was used in the data analysis and reporting of results. Measures of central tendencies, such as means, standard deviation, and percentages were used. Correlation analysis was used to describe the degree of relationship between the study variables. The study showed that documentation and procedures, too many agencies involved in overall export inspection and certification in the region, escort of all sensitive and hazardous products through the territory of each East Africa Community (EAC) transit country, and verification of transit cargo were a challenge. It also showed that lack of harmonization in working hours at the border posts, delays at weighbridges, multiple police road blocks and mobile control, prohibition on transportation of locally produced goods, and EAC transit licenses for goods were a challenge for exporters. The study showed that truck entrance fees and grace period, business registration, use of immigration and visa procedures, poor information dissemination across the East Africa community, language barrier, and insecurity/ highway crimes/loss of goods at the container freight stations were all non-tariff barriers to trade in EAC. The study showed that technical Barriers to Trade in terms of technical requirements, voluntary standards and conformity assessment procedures affect trade. The study showed that exporters in Kenya faced institutional barriers to Kenya’s trade in the EAC. The study showed that various Kenyan ministries, departments and parastatals were the institutional barriers to trade, and that KRA was responsible for the enforcement and management of the customs laws and the administration of common external tariffs hence causing TBT. The study showed that application of numerous certification and conformity assessments, and the procedure for obtaining the certificate of origin being cumbersome and lengthy were a barrier to trade. The study showed that some mitigation procedures for minimizing the impact of trade barriers would include: harmonizing product standards and developing mutual recognition of standards across member countries, carrying out verification of information on NTBs, prioritizing products, developing specific work programs, and carrying out a sector-based approach strategy that deals with issues in specific economic and politic sectors. Other mitigation strategies would include: enhancing exchange of information and views on a range of active NTB elimination programs/projects, establishing a communication network between NTB focal points, and establishing appropriate procedures for identifying and eliminating NTBs. The study concludes that documentation and procedures, too many agencies involved in overall export inspection and certification in the region, escort of all sensitive and hazardous products through the territory of each EAC transit country, verification of transit cargo, and lack of harmonization in working hours at the border posts. The study concludes that some mitigation procedures for minimizing the impact of trade barriers would include: harmonizing product standards and developing mutual recognition of standards across member countries, carrying out verification of information on NTBs, prioritizing products, developing specific work programs, and carrying out a sector-based approach strategy that deals with issues in specific economic and politic sectors. The study recommends that existing advance ruling mechanisms in various boarders and countries be classified according to the national customs tariff and verification of the origin of goods declared for preferential treatment. All parties could also introduce an advance ruling mechanism to provide information on the method that will be applied for customs valuation