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Last Updated: Saturday, 1 January, 2005, 15:01 GMT
East Africa trade accord launched
Textile factory in Nairobi
Kenya has a more developed industrial base than its neighbours
A customs union linking Kenya, Tanzania and Uganda comes into force on Saturday following six years of negotiations.

The new trading bloc is a first step towards a common market and will gradually enable goods to pass between the three countries tax-free.

The member states hope it will also lead to a common currency and eventually a political federation.

The union is an attempt to revive the East African community which collapsed 10 years after it was set up in 1967.

Correspondents say the three countries' farm-based economies are considered stable when compared to their war-devastated neighbours.

The treaty setting up the East Africa Community (EAC) Customs Union was signed last March.

Under its terms, Kenya will pay duty on its goods entering Tanzania and Uganda for the first five years, to compensate for its more developed industrial base.

[The customs union] will enable businessmen to freely access an enlarged market of over 90 million people and a combined GDP of $30bn
Kenyan President Mwai Kibaki

Tariff levels against goods from countries outside the grouping will be harmonised.

BBC East Africa correspondent Adam Mynott says it has not been easy to get this far and on a number of occasions it appeared agreement would be impossible.

But the leaders of the three countries recognise that tariff-free trade promises increased economic growth, our correspondent says.

Ultimate goals also include an East African central bank.

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