As far as trading blocs go, the European Union (EU) has been a global case study of how to turn a free market into a common market.   

Faced with notable challenges in the integration process such as the consecutive crises in the Exchange Rate Mechanism in the early 90’s, the EU defied all odds and continued to expand in depth and geography in a historic feat.

However, two years ago, this ideal trading bloc was hard hit by the Brexit vote, which triggered a global conversation on regional trading, agreements and integration towards creating shared prosperity for the countries involved.  

In our own context, a snapshot of East African Community (EAC) intra-trade in the past few years will reveal tension-filled trade-relations, as well as an overall cloud of uncertainty on the future of the bloc.  

Yet with our geographical advantages, natural resources and global reputation, EAC holds huge potential to set the pace for the Africa Continental Free Trade Area (AfCFTA) and lead the continent into a new age trading with the world on a mutually beneficial platform.

Whilst there isn’t much comparison to be made with the EU, one undisputable thing is that their integration process was marred by political and social differences especially with bringing on board Eastern European countries. Through the chaos, nonetheless, members designed new institutions with a view to open up markets and ideological alignments.

Our challenges in integration are also hampered by political and social differences, which manifest in seemingly endless Non-Tariff Barriers that threaten to weaken our overall contribution to global trade.

For instance, EAC global trade decreased in 2017 to a meagre 0.2 per cent from 0.3 per cent the previous year. The trade deficit also increased by 63.1 per cent to $17.4 billion (Sh1.7 trillion). Our exports to the world also decreased, and of these, only 29.2 per cent were destined for COMESA and other intra-regional markets. 

The latter numbers can be boosted within the AfCFTA through increased collaboration and goodwill to make use of existing instruments and well-designed policies to enhance trade and get rid of long-standing barriers. 

We have witnessed some progressive steps in this regard, which have made a significant contribution to the growth of EAC intra-regional merchandise trade. These include elimination of restrictions for imports on sensitive products, allowing for greater trade among partner states.

We have also had elimination of Non-Tariff Barriers on certain goods as well as increased trading in intermediate products. Bilateral meetings continue to find solutions to rising problems and this is due to the fact that we all have the same vision of shared prosperity—we might only differ on the ways to get there.

Going forward, it is important to prioritise collaborative approaches that will see supply chains strengthened across borders and governments laying the groundworks for the ease of movement of goods and people. This will help us realise the full potential of our own intra-regional market.

Additionally, we need to put into action a robust EAC export promotion strategy that will provide a structure for promotion of EAC products in other regions and minimise intra-regional rivalry.

When all is said and done, the EAC is uniquely poised to be a leading regional bloc in the next few years. We ought not to let what’s in store for us be derailed in the short-term.

Source: Media Max

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.