Building capacity to help Africa trade better

A new approach to a regional Free Trade Agreement in east Africa: ‘willing participants’

Trade Reports

A new approach to a regional Free Trade Agreement in east Africa: ‘willing participants’

A new approach to a regional Free Trade Agreement in east Africa: ‘willing participants’

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Earlier tralac research (Sandrey et al., 2011) explored the economic background to the so-called Tripartite Free Trade Agreement (FTA) between the Common Market for Eastern and Southern Africa (Comesa), the East African Community (EAC) and the Southern African Development Community (SADC). This showed that while there were solid economic gains to such an FTA there were also many problems, both from an economic perspective and from the political-economy perspective, and furthermore these problems were interrelated.

Highlighted were the problems of (a) overlapping memberships in the region and (b) the substantial economic losses for some countries resulting from comprehensive trade liberalisation. In addition, and while perhaps not highlighted but certainly in the background, is the regional problem of several failed or semi-failed states that are patently not candidates for regional integration.

This paper takes what can be described as the European Union (EU) approach of starting regional integration slowly from a base of those few countries that appear to be ready for comprehensive liberalisation. This EU approach has been one of starting modestly in 1960 with the original six members and slowly enlarging (and deepening) over the years to the current 27 members and counting.

We believe that such an approach has potential for east Africa and consequently we assess the five countries in the Southern African Customs Union (SACU), the five in the EAC and Egypt as being our foundation members of what we call ‘an FTA of the willing’ with tariff reductions only. The objective of this paper is to use the Global Trade Analysis Project (GTAP) computer model to assess the economic implications of this approach to regional integration.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.


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