Trade Agreements Between East African Countries

Although all of these countries are part of the East African Community, they have relatively different important trading partners. For example, Rwanda`s main export markets are mainly African countries, while Burundi`s largest export markets are non-African countries. Because of the EAC, these six countries have free trade and want to create an economic and political bloc capable of helping countries within the group to develop. [5] “I am so proud because it is an opportunity for abcE countries, many of which are landlocked countries, to sell their products within the region, in Africa and around the world,” said Frederick Ngobi Gume, Uganda`s Minister of Co-operatives, whose country currently chairs the EAC. The countries of the East African Community (EAC) include Kenya, Tanzania, Burundi, Uganda, Rwanda and South Sudan. These nations are below the level of economic activity of various sizes, such as per capita, population below the poverty line, unemployment and trade. The East African Community has sought to strengthen trade through economic, social and political cooperation within member states. [1] “The aim of the EAC is to gradually create 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. Each country is part of the World Trade Organization, with the exception of South Sudan, which remains out of the world`s largest trading group.

[3] Starting in 2014, these six countries have a total GDP of $159.5 billion, a PER CAPITA GDP of $918, a total population of $168.5 million, for a total of $40.2 billion and a total export of $13.6 billion. [4] These countries are becoming much stronger as members of the Community, as they become a larger market for off-block trade. In addition, the bloc allows for free trade between Member States, which not only helps producers who have more opportunities to sell their product, but also consumers who have more cheap products. The European Union (EU) has at least one trade agreement with the six countries mentioned. Kenya and Rwanda have signed an Economic Partnership Agreement (EPA) with the European Union. The EPA grants duty- and quota-free access to the EU market to all EAC exports, while gradually opening up agreed African countries to imports from the EU. This gives businesses an advantage under the ratified agreement in order to be able to act at a lower cost in the European Union. [16] Burundi, South Sudan, Tanzania and Uganda have yet to sign and ratify the same agreement. Although these countries have not ratified the agreement, they are all part of the All but Arms Agreement with Rwanda, as they are all on the list of least developed countries (LDCs).

This provides duty-free and quota-free access to the EU market for all exports, with the exception of arms and armaments. Most of the East African Community`s exports to the EU are primary products, especially food products. [17] Under Engel`s law, these countries are at risk of a drop in the relative price of food. This theory says that when global per capita income increases, the demand for luxury goods increases, causing the relative fall in prices of products such as food products. [18] Total exports to the EU amounted to EUR 2.4 billion in 2017. Most imports from the EU are machinery, mechanical machinery, equipment, parts, vehicles and medicines. Total imports from the EU amounted to 3.6 billion euros in 2017. [19] In principle, the implementation of AfCFTA will pave the way for the rapid removal of these barriers to cross-border trade.