Trade Agreements in East Africa

“It also gives us the opportunity to simplify the import and export of raw materials. Such an approach reduces bureaucracy, with online authorizations reducing contacts at the border. This initiative will go a long way in promoting trade within the EAC and beyond. The EU-EAC EPA covers trade in goods and development cooperation. It also contains a chapter on fisheries, in particular to strengthen cooperation on the sustainable use of resources. The agreement provides for the continuation of negotiations on services and trade-related rules in the future. Guillermo Arenas is an economist in the World Bank`s Trade and Regional Integration Unit (ETIRI). His area of expertise covers various aspects of international economics and law and order, including trade policy, export competitiveness and impact assessment. The scope of the AfCFTA is vast. The agreement will reduce tariffs between member countries and cover policy areas such as trade facilitation and services, as well as regulatory measures such as hygiene standards and technical barriers to trade. Full implementation of the AfCFTA would reshape the region`s markets and economies and boost production in services, manufacturing and natural resources. The World Bank`s report, The African Continental Free Trade Area: Economic and Distributional Effects, is designed to help policymakers implement measures that can maximize the potential gains of the agreement while minimizing risks.

Creating a continent-wide market requires determined efforts to reduce all trading costs. Governments also need to develop strategies to increase the willingness of their workforce to seize new opportunities. The United States and the EAC have signed their own Trade and Investment Agreement (TIFA) and Cooperation Agreement. TIFA seeks to increase trade and investment between the two regions, thereby increasing growth, job creation, trade, technology and economic development, while increasing transparency to prevent corruption. [20] The cooperation agreement aims to strengthen economic relations within the region. The three main areas of the agreement are trade facilitation, sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT). These areas focus on improving trade between the two entities and also improving the infrastructure of African countries, such as the Desire for the United States to trade more with the rest of the continent and improving a port in Mombasa, Kenya and Dar es Salaam in Tanzania. [21] The main export categories to the United States are woven clothing, knitwear, spices/coffee/tea, and edible fruits and nuts, which are part of total exports of $788 million in 2015. The main import categories are aircraft, machinery, electrical machinery and cereals, which were part of total imports of $1.2 billion in 2015. [22] Israel Osorio Rodarte is an economist in the World Bank`s Department of Trade and Regional Integration. He has over 10 years of experience in international development, particularly in the areas of economic diversification, structural change and distribution analysis of trade and macroeconomic policies. “This trade facilitation initiative provides us with a good opportunity to deepen our regional and continental economic integration agenda to boost intra-African trade.

We must seize the opportunity to realize Africa`s dreams of prosperity. At a meeting in Nairobi, Kenya, representatives of member countries of the East African Community (EAC) Customs Union and Common Market said they would implement trade facilitation reforms, including the removal of “non-tariff barriers” such as burdensome and incompatible product regulations. At the same time, UNCTAD and TMEA, a non-profit organization created to support the growth of regional and international trade in East Africa, also renewed their cooperation agreement for 2019-2021. Regional trade integration is a cornerstone of the trade policy of the EAC partner states. This includes strengthening public institutions and private sector organizations involved in export promotion. One of the great blessings for the region through the AfCFTA will be the removal of trade barriers between Kenya and Ethiopia – the two largest economies in East Africa. Despite previous efforts to deepen economic relations, the volume of bilateral trade between the two countries remains extremely low. In fact, total bilateral trade in 2019 did not even reach $70 million, accounting for only 0.5% of Ethiopia`s total exports and 0.09% of Kenyan exports, and consists mainly of food and live animals and some industrial products (Table 1). East African Community (EAC) countries include Kenya, Tanzania, Burundi, Rwanda, South Sudan and Uganda. These countries are below average in various measures of economic activity such as GDP per capita, population below the poverty line, unemployment and trade.

The East African Community has sought to strengthen trade by improving economic, social and political cooperation within member States. [1] “The objective of the EAC is to progressively establish a customs union, a common market, a monetary union and, ultimately, a political federation of East African states.” [2] The countries of the East African Community also have active trade with other parts of the world, such as the European Union. All countries are part of the World Trade Organization, with the exception of South Sudan, which remains outside this conglomerate. [3] In 2014, these six countries had a combined GDP of $159.5 billion, a GDP per capita of $918, a total population of $168.5 million, a total import of $40.2 billion, and a total export of $13.6 billion. [4] These countries are becoming increasingly strong as members of the Community as they become a larger market for trade outside the Union. In addition, the bloc allows free trade between member countries and helps not only producers who have more opportunities to sell their product, but also consumers who have more cheap products. In the Declaration, EAC countries commit to supporting National Trade Facilitation Committees as the main tool for coordinating the implementation of trade facilitation measures. Yulia Vnukova advises in the Trade and Regional Integration Unit (ETIRI) of the World Bank. Based on more than a decade of experience, Yulia`s current work focuses on trade policy and regional integration, with a focus on macroeconomic and microeconomic analysis of trade, trade and sectoral competitiveness, global value chains and private sector development in emerging markets in Europe, Asia and Africa. The Nairobi meeting would be the first time that a regional bloc in Africa would meet at this level to commit to implementing trade facilitation reforms in the light of the AfCFTA and the WTO Trade Facilitation Agreement. Maria Filipa Seara e Pereira advises in the World Bank`s Regional Trade Integration Unit (ETIRI).

She works mainly on international trade and development topics, particularly in the areas of modelling, trade policy, distributive effects of trade and global value chains. Roberto Echandi is a Senior Private Sector Specialist at ETIRI. It focuses on research and policy advice on issues related to cross-border trade in services, the negotiation, implementation and maximization of the potential benefits of deep integration trade agreements and the AfCFTA negotiation and implementation process. The United States had a total merchandise trade of $1.6 billion (in two ways) with East African Community countries in 2017. Exports of goods totalled $795 million; Imports of goods totalled $828 million. The U.S. trade deficit in goods with East African Community countries was $33 million in 2017. A third related question is how to conduct future trade negotiations with third parties. Given the consequences of a possible expiration of the African Growth and Opportunity Act (AGOA) in 2025, Kenya has already begun negotiations with the aim of concluding a free trade agreement with the United States. The UK wants to conclude new trade agreements after its withdrawal from the European Union and is also getting closer to a number of countries in the region.

The free trade agreements between Kenya and the United States have been particularly controversial, but perhaps wrongly: in principle, nothing prevents East African countries from negotiating with third parties. However, for the reasons explained above with regard to rules of origin, it is preferable to avoid completely different approaches to negotiations with third parties. Frank Martsaert, Chief Executive Officer of TradeMark East Africa (TMEA), who supported the ministerial meeting, said that since 2010 we have “a strong partnership with the EAC Secretariat and partner countries to increase trade and deepen the regional integration agenda by investing in physical and soft trade infrastructure. Together with UNCTAD, we look forward to continuing the partnership and supporting the region`s trade facilitation agenda, as outlined in the Ministerial Declaration. Burundi, Rwanda, Tanzania and Uganda are covered by the EU`s Everything But Arms initiative, under which all products from least developed countries, with the exception of arms and ammunition, enjoy preferential access to the EU market. .