The EAC Common External Tariff (CET) and Rwanda

A major pillar of Rwanda’s economic policy, beginning with its Vision 2020 document of 2000, has been to work toward deeper integration into regional and international markets. It took a major step forward on this front with its membership in the East African Community (EAC) in 2007, and then with its implementation of the Common External Tariff (CET) of the EAC on July 1, 2009. This step is consistent with its overall goals of economic development, in particular with the exporting plan of the National Export Strategy (2011).

The purpose of this report is to analyze and evaluate Rwanda’s membership in the Common External Tariff (CET) of the EAC with a goal of making recommendations to improve this tariff for the benefit of the country of Rwanda. Since the CET was implemented on July 1, 2009, it has already been in effect for more than 2 years. The CET will be evaluated from the perspective of the past two years in terms of its impact on outcomes of interest. Particular focus in this report will be given to its impact on exports, as well as its impact on the real incomes of relatively poor households. As noted in the National Export Strategy (NES), “analysis of the common external tariff (CET) implications is critical for Rwanda’s export sectors.” (NES, p. 20). This report aims to complement previous studies, including de Melo et al. (2011a) and de Melo et. al. (2011b), as well as Carrère and de Melo (2008) that have contributed to this analysis.