East Africans celebrate the common market
The Nation, Kenya
East Africans celebrate the common market
1 July 2010
We welcome the East African Common Market. Granted, what is being celebrated today has not come with all the freedoms associated with such an entity.
A common market comes with free movement of people and elimination of work permits, with free movement of capital across borders, and the right of citizens to start businesses in any town or location within the region. But what we are proclaiming today does not do so.
Yet what has happened still represents a major milestone in the process of integrating the region economically. It is a statement of political commitment to complete a long journey.
Today, the phenomenon known as globalisation is forcing continents and regions into forming unions, free trade areas, preferential trade arrangements and all manner of economic groups.
The Europeans have the European Union, the North Americans, the North American Free Trade Area, the Asians, Asean Free Trade Area, and the South Americans, the grouping known by the acronym, Mercusor.
In committing to a common market, East Africa is setting the pace. What has been created is but one of the building blocks towards a future continental trade bloc as envisaged several years ago in the Lagos Plan of Action.
Indeed, Africa has several of these building blocks in different stages of economic integration. The South African Development Co-operation (SADC) is evolving into a customs union.
Comesa, the single largest economic grouping on the continent, will be a fully-fledged customs union in a matter of months. Ecowas, the economic grouping for West African countries, is growing rapidly.
The multiplicity of trading blocs is not without problems, though, due to overlapping membership, especially when it comes to negotiating reciprocal concessions on tariffs.
Merger proposals
Tanzania is a member of both SADC and EAC. Kenya, Uganda, Rwanda and Burundi are members of both the EAC and Comesa. Madagascar, Zambia, Zimbabwe, Malawi and Mauritius are members of both SADC and Comesa. There is a strong case for rationalising the membership in trading blocs.
Following Comesa’s decision to adopt EAC’s common external tariff trading arrangement, there have been proposals to merge Comesa and EAC. The region’s leaders must pursue this idea seriously.
Many groupings have collapsed because of grumbling by smaller economies, to the effect that they only served the interest of the larger economies. They complain that regional blocs commit them to importing low-quality goods from their regional partners rather than from more efficient global producers.
They may continue to grumble. But as the success so far has demonstrated, trading blocs can only succeed when they embrace the principle of asymmetry — when the economically stronger partners agree to accommodate the fears of their weaker partners.
When the customs union was signed in 2005, Kenya, the regional economic power, agreed to grant its neighbours several concessions. While all the imports from Uganda and Tanzania were allowed in duty-free, the two neighbours were allowed to charge duty on a number of Kenyan exports.
The countries of East Africa are joined by geographical proximity, by language and shared historical bonds. We celebrate the birth of the common market, and thank the region’s political leaders for doggedly negotiating one protocol after another and agreeing to reciprocate concessions at every stage.
