We are currently studying and analysing some of the trade blocs that exist around the world.  Three East African countries; Uganda, Tanzania and Kenya formed a Customs Union in 1967 with the lofty aims of developing free trade. An article in a past edition of the Economist, explains the evolution of trade in this part of Africa and also explains how the group of nations is attempting to revitalise and strengthen the agreement.

An East African Federation – PDF download

Each of the nations who are members of this trade bloc are at different stages of development, thus have different things to gain or lose through the expansion of the trade bloc. Uganda is rich with natural resources such as oil, Tanzania lacks the same educated workforce of Kenya, which inturn has high levels of endemic corruption. The risk for all three nations in a free trade agreement is the exploitation of resources across national borders.

This is a good video which introduces the new Common Market.

Click here to view the embedded video.

Have a read of the article at the link above and complete the following discussion questions.

Discussion Questions:

1. What kind of trade bloc exists between the existing members of the East African Community?
2. Who are the original members of the EAC?
3. Describe how the East African Communtiy (EAC) has changed overtime?
4. What are the advantages of altering the EAC to become a customs union and common currency union, with a bigger population base, and to include nations such as Somalia, South Sudan and Congo
5. What are the disadvantages of such a policy?

Louris Yamaguchi – CC Commons – Flikr

Related posts:

1. Trading blocs and economic integration – IB student case studies
2. SAS students organize swimathon to help fight malaria in Africa – here’s how you can help!
3. Global fiscal stimulus and the plight of Africa: what’s really needed, more aid or more trade?

A trading bloc is “a group of countries that join together in some form of agreement in order to increase trade between themselves and/or to gain economic benefits from cooperation on some level.”

Below is a list of some of the regional trading blocs. The assignment is to:

• Identify the nations involved in your assigned trading bloc
• Identify the kind of trading bloc (customs union, free trade area, common market, monetary union)
• Discuss the impact that membership in the trading bloc has had on the economy of one member nation

Research your assigned trading bloc, prepare a short summary of the points above, and post your findings as a comment below.

• Pacific Regional Trade Agreement (PARTA or PIF) – Christina, Myrthe and Manka
• European Economic Area (EEA) – Lisa and Pia, Lis and Livia
• Caribbean Community (CARICOM) – Catherine and Sean, Maddie
• Union of South American Nations (Unasur/Unasul) – Eithan and Wilhelm, Alex and Gorka
• East African Community (EAC) – Miguel and Ross, Nick and Dierdre
• Southern African Customs Union (SACU) – Horia,
• Greater Arab Free Trade Area (GAFTA) – Calvin, Magda and Robin
• North American Free Trade Agreement (NAFTA) – Nic
• Association of Southeast Asian Nations (ASEAN) – Matteo, Sebastian and Moritz
• Central European Free Trade Agreement (CEFTA) – Meri and Natasha
  
• African Economic Community (AEC) – Palmi and Celine
  

Related posts:

1. A Customs Union in Africa
2. You Make The Video Call: McCain vs. Obama on Free Trade
3. Fair trade vs. free trade: the problem with “dumping”