Analyzing Trade Integration: Africa's Trade Agreements and Development

This essay provides an overview of trade integration in Africa, focusing on various forms such as free trade, customs unions, and common markets. It discusses the African Continental Free Trade Area (AfCFTA) and its potential to boost trade among African nations. The essay also examines the East African Community (EAC) and other regional initiatives aimed at removing trade barriers and promoting economic growth. While highlighting the successes of trade integration in Africa, the analysis also acknowledges challenges and areas for improvement, such as integrating with global trade and ensuring equitable benefits for all member states. The document concludes that while Africa has made strides in trade integration, continued efforts are needed to address existing limitations and maximize the potential for sustainable economic development. Desklib offers a wealth of resources, including similar essays and study tools, to further explore this topic.

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Contents
Introduction..............................................................................................................................2
Forms of Trade Integration.......................................................................................................2
Free Trade.............................................................................................................................2
Common Market...................................................................................................................3
Custom union........................................................................................................................4
Improvements...........................................................................................................................4
Conclusion................................................................................................................................6
Refrences..................................................................................................................................7

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Introduction
Trade integration is a unification of trade policies between different states which
include trade barrier, free trade, custom union, common market, and economic union as
factors. Each and every country participates in international trade. Countries improve as well
as remove the trade barriers in trying to make the market free. When a flow of trade is faster
and cost-effective, then the business and country is benefited. Trade affect the people’s
livelihood, economy of the country and developmemt of the country (The Free Dictionary,
2018).
In this page, forms of trade integration of Africa and improvement of trade among
nations and also there examples are discussed.
Forms of Trade Integration
After the integration countries achieves higher degree of integration. Africa also
applied the adjustments for successive trade integration. The arrangements are given below:
 Free trade
 Common Market
 Customs Union
Free Trade
Free trade means the free market in which government of the country did not restrict
export, import between the countries. Free trade supports the protectionism in the country.
Government imposed taxes on import and gave susidies on export (Robson, 2012). African
free trade zone was announced on 22 October 2008. An objective of free trade is to create a
single market for goods and services in Africa. Africa signed an agreement to launch the
AFCFTA ( African Continental Free Trade Area) in Kigali, and Rwanda. It will be the
world’s largest free-trade areas with the number of countries and billions of people. This

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agreement has the capacity to deliver a deal to countries on the continent (Witschge, 2018).
This market was created with the hope to boost trade between the countries but the economy
relies more on export. African deals each other with the percentage of 16% nad rest of the
deals done with the outside. Young people cannot find the job while the country has this type
of economy. Africa faces challenges after it announced free trade because it increased the
Africa competition of trade with the other countries (The conversation, 2018).
Common Market
To promote tax-free trade and free movement of capital and labour among its
members, countries formed a group within a geographical area. Africa also adopts the
common market to promote duty-free trade and also to encourage tourism. Africa has three
communities these are East African community, Southern African Development Community
and Common Market for Eastern and southern Africa. The population of Africa is free to
move from one country to another for buying goods and services without paying taxes. EAC
traders commercial transaction not face the problem of exchanging money. EAC decreases
the poverty in Africa and also motivate most of the traders who have a fear of losing their
jobs. But because of Common market, prices and common money is same in all countries but
salary is not same of all the members like Uganda it will less salary as campared to Rwanda.
Small states take less intiative of participation on security problems (Cole & Brewer, 2013).
Custom union
To remove trade barriers and eliminate custom duty on mutual trade, an agreement is
made between two or more countries but did not allow free movement of capital and labour
within the countries. Customs Union is the critical foundation of the east African community.
East African community partners agreed to trade free means without duties on goods and
services. EAC zone is same at the time of import and export to the EAC partner state. EAC
Custom union set the uniform policy and law set at the same level. A procedure of custom

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and external tariff on goods and services from third countries, develop the economy and
reduce the poverty. But the problem is that the country cannot deal seperately because there is
common external tarrif. It reduces national sovereignty ( East African Community, 2017).
Improvements
Africa needs some improvement to boost the trade among the nation. Under single
market, CFTA (Continental Free Trade Africa) is a project to bring closer all African
countries to each other for trade including free movement of import and export of the goods
and services. It compromise 1.2 billion people and a combined GDP of over b$3.4 trillion.
CFTA increase the trade of Africa between the countries by around $35 billion(World
Economic Forum, 2018) .
East African community(EAC), it is the fastest growing community in the African
continent. It achieved success with the initiative to remove barriers from trade and
investment. In EAC, South Sudan comes into partnership and gain success. The strongest
point of a partnership is political will, visionary leadership, focus, inclusiveness and joint
monitoring both from the private and public sector.
East African community, Southern African Development Community and the
Common Market for Eastern and Southern Africa created with 26 country market with the
population of 625 million and gross domestic product more than $1 trillion
Single market has the capacity to push trade level up. It increases the trade from 15%
to 25% within a decade. 10% trade increased, with increased the continent annual economic
growth by the single market (The Guardian, 2018).
.

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Conclusion
For removing the trade barriers and for improving the trade some factors are used
such as free trade, custom union and common market. Africa also used the trade integration
for development of trade and economic growth. in Free trade, Africa launched AFCFTA for
free trade and also for boosting export. For boosting export government of the Africa
imposed quotas on import and gave subsidies on export. Africa also used common market for
tax free trade in the economy and also for encourage tourism, in the country. Africa made
communities such as East African community, Southern African Development Community
and Common Market for Eastern and Southern African. These communities allow dealing
with goods and services without paying tax. Custom union is also a way to remove trade
barrier, it makes partners to agree to an agreement to deal without paying tax but it did not
allow free movement of labour and capital. Africa achieved success and increased the trade
with the help of these factors. Single market compromise the countries. EAC comes in
partnership with the South Sudan. Africa made a common market of 26 countries market and
increased the trade among the nation. Africa launch project and made communities but Africa
is not good to integrate with global trade.

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Refrences
Cole, R., & Brewer,Q. (2013). My Revision Notes: Edexcel A2 Economics eBook ePub.
United Kingdom: Hachette.
East African Community. (2017). What is the Customs Union?. Retrieved from:
https://www.eac.int/integration-pillars/customs-union
Robson, P. (2012). Economic Integration in Africa. Oxon: Routledge, pp. 25-26.
The Conversation. (2015). What African countries must do to boost trade among themselves.
Retrived from: https://theconversation.com/what-african-countries-must-do-to-boost-
trade-among-themselves-44090
The free Dictionary. (2018). trade integration. Retrieved from: https://financial-
dictionary.thefreedictionary.com/trade+integration
The Guardian. (2018). Economic integration is helping boost trade and investment in Africa.
Retrieved from: https://www.theguardian.com/global-development-professionals-
network/2016/may/10/economic-integration-is-helping-boost-trade-and-investment-in-
africa
Witschge, L. (2018). African Continental Free Trade Area: What you need to know.
Retrieved from: https://www.aljazeera.com/news/2018/03/african-continental-free-trade-
area-afcfta-180317191954318.html
World Economic Forum. (2018). How a single market would transform Africa’s economy.
Retrived from: https://www.weforum.org/agenda/2018/02/how-a-single-market-will-
transform-africa-s-economy/

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