Trade partners who could ruffle EAC nest

The decision by Heads of State from the East African Community — Kenya, Uganda, Tanzania, Rwanda and Burundi – to sign the protocol establishing the East African Common Market was one of the hallmarks of 2009.

The protocol is expected to ease trade by harmonising duties on goods and creating a more predictable tariff structure for external trade partners.

So far, the progress at EAC has reignited attention on the speed, shape and form of economic integration across Africa.

Since the 1950s, Africa’s leaders and thinkers have acknowledged that economic integration would lessen the continent’s economic and political marginalisation.

What lacks is the handiwork to take this goal beyond the realm of conjecture and optimism.

At a Pan African level, the African Union has been at the forefront of advocating for economic integration.

For instance, in 1963, the Organisation of African Unity unveiled a proposal to establish a continental African common market.

While this level of ambition has not matured to its full intent, the various Regional Economic Communities (like EAC, Southern Africa Development Community and Economic Organisation of West African States) are increasingly being seen as essential building blocs in the quest for a continental economic architecture.

But while formations such as the EAC are seen to be more practical and beneficial, there is a growing concern that Africa could be spreading herself thin in negotiating multiple trade arrangements.

New concessions are being exerted upon the same regions by external trade partners hungry for a piece of the cake too.

Further, granted the complexity of regional integration, there is widespread concern that the undue emphasis on trade liberalisation in negotiations with the EU and other trading powerhouses could scuttle rather than consolidate economic integration within specific regions like East Africa.

Complexities involved

The trade negotiations between African countries and the European Union (EU) have shown the complexity of consolidating economic ties amongst African countries, which have been pressured to negotiate with the EU under new configurations.

There is fear that the negotiations could slow down efforts towards regional integration and overwhelm African countries set against the negotiating arsenal of the 25-member EU.

For instance, West Africa, the largest Africa grouping, is more than 80 times smaller than the EU in GDP terms.

A study commissioned by the EU predicted that once concluded, the EPA negotiations with West Africa would result in import surges above 15 per cent on key commodities such as onions, potatoes, beef and poultry which stands to adversely affect farmers’ livelihoods.

The critical concern, though, is that all the regions engaged in the negotiations with the EU have been severely disrupted by overlapping membership to different negotiating configurations.

As a result, there is a risk of countries undertaking trade commitments with the EU such as reduction of tariffs to the detriment of their traditional trading partners with whom they may have different regional tariffs.

A good example is South Africa’s trade agreement with the EU which has effectively bound all the Southern African Customs Union countries — Botswana, Lesotho, Namibia and Swaziland — to the external tariff agreed on EU-South Africa trade.

Also, 16 of the member states of the Southern Africa Development Community and the Common Market for Eastern and Southern Africa are negotiating with the EU under the Eastern and Southern Africa (ESA) configuration; the Democratic Republic of Congo falls under the Central African Group while the other SADC countries are negotiating under the SADC grouping.

On the other hand, Tanzania negotiated separately from both Kenya and Tanzania with whom it shares EAC membership.

These concerns, though, do not necessarily mean trade blocs like the EAC cannot benefit from a more ambitious regime with Europe and others.

But, limitations faced by such blocs must be addressed especially, the need to harness capacity to trade in value-added exports.

In today’s new global economic dispensation, there are few alternatives to economic integration.

By closing ranks within the framework of regional initiatives like EAC countries can stem economic marginalisation and benefit from trade.

Gichinga Ndirangu is a policy analyst