The East African Community (EAC). The difference between theory and practice based on the example of the free Movement of Goods and Services


Master's Thesis, 2014

69 Pages, Grade: 65%


Excerpt

Table of Content

Summary

List of Abbreviations

Preface

Introduction

Regional Integration
Globalisation and the History of Regional Integration
International Organisations
Regional Integration in Africa

The EastAfrican Community
History and the original EAC
The EAC today
Notable achievements of the new EAC
The EAC's legal regime
The Dream of a Monetary Union
Threats to the EAC
Future Enlargement of the East African Community
Sudan
South Sudan
Somalia

Summary

The five East African countries Kenya, Tanzania, Burundi, Uganda and Rwanda have over the past one and a half decades undertaken a renewed attempt to integrate their economies in order to preserve peace and facilitate economic growth and prosperity in the region. A milestone in this attempt has been the introduction of the EAC Common Market. This dissertation looks into the EAC's genesis and its current situation before dealing with the Common Market in more detail. To better illustrate the problems East Africa faces when it comes to the implementation of regional treaties, particular attention will be paid to the free movement of goods and services and the difference between theory and practice.

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

Preface

After the collapse of the first East African Community in the 1970s and over two decades of political decline later, today East Africa again works in unison...in theory. This dissertation shall give the reader an overview of the process of regional integration in East Africa, its history and status quo. The EAC faces many issues and answers to crucial questions like Tanzania's commitment to the project or the fight against excessive corruption are to be found soon in order to make the second attempt of regional integration in East Africa a more successful and sustainable one.

The gap between theory and practice in the process of integration shall be illustrated through an expert interview, which includes practical examples of the movement of goods throughout all five EAC member states. Because of its leading economic position and its dominant port city Mombasa, the economic powerhouse of the region, Kenya, will play a predominant role in this dissertation's examples.

This dissertation is a doctrinal as well as a socio-legal study of regional integration and the author's aim is to give a unadorned introduction to EAC studies. It is the first academic paper dealing with the free movement of goods and services in the East African Community to date, thus analysis is based on the analogue interpretation of the very scarce existing East African legal sources and the experiences of the interviewee, Samir Dave, to whom I want to extend my gratitude for having me welcomed to his home in Nairobi, Kenya and patiently answering all my questions. His 14 years of experience have been of immense value to this dissertation.

Furthermore I would like to extend my gratitude to Professor Craig Barker for supervising and assisting me with the exotic dissertation at hand and to Johannes Döveling of the Tanzanian-German Centre for Eastern African Legal Studies for having an open ear to all my questions and for supporting me throughout my research at the University of Dar es Salaam School of Law.

Introduction

East Africa is a paradise; Bitala describes it as the part of the continent with the most spectacular people, landscapes and wildlife. Kenya alone is home to 42 tribes, dozens of national parks, rainforests, semi-deserts, huge lakes, the highest mountains of Africa and the stunningly beautiful coast with its white beaches and palm trees.1 But East Africa is also hell on earth; it is where people die because they lack money for a single meal a day or a drought or the never-ending rain has ruined the harvest. Children die because of diarrhoea, malaria or cholera, because their parents are not able to pay for their treatment.2 The pressing need of economic change and prosperity is well known amongst African leaders. Donald Kaberuka, president of the African Development Bank (AfDB), highlights two of Africa's main economic problems: the general lack of regional integration and its bad execution.

"Africa's leaders have long recognized the importance of economic integration as a remedy for the continent's fragmentation. The story line of Africa's 54 countries is that over half of them have a Gross Domestic Productunder USD 10 billion, 16 are landlocked, struggle to achieve the economies of scale required to become competitive internationally and have challenges associated with small size and small markets. That story is known.

That is why, through successive agreements, African governments have committed themselves to the pursuit of greater integration. These commitments, however, have not always proved easy to implement. In practice, national priorities have often trumped regional needs, a phenomenon not unique to Africa of course.3"

Regional integration is a necessity in order to compete with today's economic and cultural developments caused through globalisation.4 The phenomenon of globalisation is unlikely to slow down, and thus weaker players in the economic order have to catch up in order to not be excluded from economic growth. Its bad execution, on the other hand, depends on many things, but most importantly it has to, at least partially, win the fight against one of Africa's biggest enemies: corruption.5 '6

The dissertation at hand, "The East African Community: The difference between theory and practice based on the example of the free Movement of Goods and Services" is the first of its kind focusing on the free movement of goods and services and the challenges East Africa faces with the implementation of international treaties. Because of the exotic nature of the topic the reader first shall be given an introduction to the interaction of regional integration and globalisation. Subsequently an overview of the East African Community, its history, achievements and obstacles, before taking a closer look at the EAC's Common Market, the free movement of goods and services and its implementation.

Two different approaches to law, namely the doctrinal approach and the socio- legal approach will play an important role in this essay; the former is the ability to "identify, analyse and synthesise"7 norms and it is a necessary tool in order to understand the legal foundation of the EAC, its treaties, relevant national provisions and protocols. The latter approach, also known as "law in context"8, has been defined by the Economic and Social Research Council as "an approach to the study of law and legal processes" which "covers the theoretical and empirical analysis of law as a social phenomenon"9 and will play an equally important role when it comes to the analysis of problems and issues in the process of regional integration. Furthermore, an expert interview will illustrate prevalent practices of regional trade in the EAC and will serve as a primary example of the movement of in East Africa.

Regional Integration

Globalisation and the History of Regional Integration

"Globalisation represents the most significant aspect of current international relations. Yet, a shift towards regionalism and bloc formation is increasingly apparent.10"

-Sandro Sideri

Globalisation is a striking and important phenomenon since the introduction of steamships, railroads and the telegraph11 and can be characterised as "the worldwide movement toward economic, financial, trade and communications integration.12 " A more pessimistic definition of globalisation would be "the dominance of developed countries in decision-making, at the expense of poorer, less powerful nations,13 " and the monitoring of regional integration shows that it partially wards off the worst effects of globalisation and it unites countries. On the downside, however, it encourages sub-national movements, thus it spurs the dangers of national divisiveness.14 This means, that regional integration is a necessary tool to repel the hard-line effects of globalisation. Considering that globalisation is a continuous process rather than an event in history,15 eventual negative consequences as mentioned above will continue to occur and regional integration is unlikely to become less appealing for weaker players of the international community.

Two great geopolitical events spurred the expansion of capitalism, which is today considered global: First, the end of colonial rule and the world's segmentation into economic imperial zones and second, the collapse of the Soviet Union and the resulting opening of Eurasia to capitalist penetration.16 These two events made the economy truly global, with the capitalist system spreading almost worldwide. Of course exceptions remain, mainly among smaller communist countries like Cuba, but they are declining or may be expected to start declining soon.17 After the economy going global, regional integration too encompassed most geographical areas across the planet.18 Spurred by the decolonisation in the 1960s, still framed by the cold war, regions around the world "fostered a series of attempts at cooperation among neighbouring states in an era of nationalist restoration and protectionist economies.19 " Shortly after the expansion of regional integration just a few years after decolonisation set in, most efforts had failed and even the prime example, the European Community (EC), struggled under the effects of "Eurosclerosis" (The economic stagnation resulting in high rates of unemployment and lagging job creation during periods of economic growth in Europe20 ) between the 1970s and early 1980s.21 It was not until the downfall of the Soviet Union, when in the 1990s regional integration was revived in a new and different way compared to the earlier wave.22 The so-called "new regionalism" was characterized as open, following different objectives, instead of pursuing import substitution it aimed at promoting exports.23 Summarily, it did not intend to close the region in a defensive way but to improve national competitiveness in an increasingly free- trade environment and the world's fears to be divided into several blocs receded while the new regionalism began to be thought of as a feature of the wider globalisation process.24

Integrating a region is never easy and differentiates strongly depending on the region, but it mostly involves a certain shift of power within the region and sometimes loss of sovereignty for national states. The stage the world currently finds itself in is being described as transgovernmentalism by Slaughter, meaning that the state is not disappearing as opposed to new medievalism, which proclaims the end of the nation-state, but disaggregating into its separate parts, which are networking with their counterparts abroad.25 In transgovernmentalism, Slaughter describes an increasingly borderless world, without local governments giving up control in its entirety and shifting the power to organisations and private bodies, but disaggregating of the state into its functional components.26 The creation of networks of institutions engaged in a common enterprise is the result, which consequently strengthens the state as the primary player in the international system.27 To better understand the interplay between globalisation and regional integration, a brief overview of the development of the latter is helpful: Basedow argues that several international events made the world move from regionalism in the second half of the 19th century toward universalism after world war two.28 It was not until the very recent past that regional organisations experienced strong tailwind and pushed the legal unification processes worldwide on a regional basis.29 Of course, when referring to the "dawn of inter-regionalism”, Basedow primarily refers to the harmonization of private law,30 but this author takes the stance that both the idea of inter-regionalism and the theory of transgovernmentalism as briefly mentioned above will play an important role not only when it comes to harmonizing law regionally, but also when it comes to political, economic and cultural regional integration. The present economic and political status quo is seen by some commentators as a milestone in human science and as at the edge of a new human society with effects comparable to the caesura the industrial revolution brought about.31 Of course the "degrees of enthusiasm32 " vary, but the interaction of functional divisions of national governments and of whole regional bodies/organisations is a notable development.

Besides the, currently under scrutiny but generally robust, strong, and expanding integrative movement in the EU, lesser developed countries follow Europe's lead: South-East Asia engages in the Association of Southeast Asian Nations (ASEAN) and the Americas are continuously working towards a free American market, even beyond the North Atlantic Free Trade Area (NAFTA), interalia.33

International Organisations

It is to be distinguished between two types of international organisations: intergovernmental organisations, or international governmental organisation (hereinafter IGO), and nongovernmental organisations (NGOs).34 The two types of organisations share particular common characteristics, such as "a permanent organisation to carry a continuing set of functions, voluntary membership of eligible parties, a basic instrument stating goals, structure, and methods of operation, a broadly representative consultative conference organ, and a permanent secretariat to carry on continuous administrative, research, and information functions.35 " For the dissertation at hand, the former, IGOs, will be dealt with in more detail.

For an IGO to be established, three conditions are considered essential: Independent political communities, rules agreed upon among such communities that purport to regulate their relations with each other and, lastly, a formal structure to implement and enforce those rules.36 Independent political communities are necessary, because a regulatory structure would be essentially imperial or hegemonic, if it was not part of a single polity.37 The second condition is important because without it, orderly relations would be a random consequence of informal interaction among sovereign entities.38 Lastly, implementing and enforcement of rules would otherwise depend on diplomacy and statecraft instead ofby independent bodies created for that purpose.39

Arguably among the first such IGOs was the Amphictyonie Council of ancient Greece, existing primarily to enable Greek city-states to engage in common religious observance and protect the shrine at Delphi.40 Medieval Christendom also had its forerunners of today's IGOs: ecumenical councils, chivalric orders, and sophisticated and far-reaching international legal structures including courts of appeal and arbitration. Of course western Christendom's structure presided over by the pope is to be seen critically under the previously given definition of an association of independent political communities.41 But it was not until the nineteenth century that IGO re-appeared in a manner that goes along with today's definition of such organisations.42

"We are found to possess a country to which war is alien and which takes no interest in commercial exploitation of weaker countries as a national pastime. Other countries, weary of past conditions, with such an exemplar before them, seek to discover from our form of government if there may not be such a thing as a United States of the world (,..).43 "

-Jackson H. Ralston

When addressing the U.S. Senate in January 1917, president Woodrow Wilson presented fourteen points as the World War 1 aims of the United States.44 The famous fourteen points were adopted, the last of which planned to coin a so- called League of Nations, defined by president Wilson as "a general association of nations must be formed under specific covenants for the purpose of affording mutual guarantees of political independence and territorial integrity to great and small States alike.45 " In 1919 at the Versailles Peace Conference, representatives of the victorious powers gathered and their aim was to write a treaty that would create a "new, permanent world organisation that would deal with the problem of peace and security and with economic and social questions.46 " The League of Nations was established, spurred by the terrible experience of a world war, it had the task to seek settlement between the defeated and the victorious powers and to establish a functioning international system after WW1.47 Of course WW2 showed that the League of Nations' success was moderate, it did however contribute towards the creation of some of the most important post­war organisations.48 Britain, the United States, and the Soviet Union participated in wartime meetings and intense diplomatic activity, and together with China they lay the groundwork for the UNO at the Dumbarton Oaks meeting (1944) and the Yalta Summit (1945).49

Regional Integration in Africa

Ever since decolonisation, Africa, a continent of one billion people and 54 sovereign and independent nation states, has been looking to regional integration as the most efficacious way to reach the common goal of 'pan­Africanism', meaning a united Africa, working together towards creating a better future for the continent.50 Africa's countries have grasped that they need to pool their resources in regional arrangements in order to confront the daunting challenges of the global markets collectively and strengthen their bargaining power globally.51 Market size and growth play an important role; location decisions of multinational corporations as well as decisions about foreign direct investment and industrialization policies of the integrating countries depend on it. 52 Many previous sub-Saharan countries have based their industrial development on unsustainable import substitution strategies, keeping small enterprises producing uncompetitive consumer goods.53 Combined with the so- called "structural-adjustment" programs of the international financial institutions, the liberalization of African economies has led to massive deindustrialization as well as economic decline, failing to exploit inter-African trade.54

Although over half a century has passed since the end of colonial rule, the ideal of integration remains unfulfilled and Africa still did not make the important step from intergovernmental cooperation to supra-national decision-making.55 According to Olivier, a new paradigm of African integration is necessary in order to achieve authentic future regionalisation, and the creation of sub-regional institutions seem to be a promising step to achieve that aim.56 In 1961, Ghana's intellectual and first president Kwame Nkrumah said: "For centuries, Europeans dominated the African continent. The white man arrogated to himself the right to rule and to be obeyed by the non-white; his mission, he claimed, was to 'civilise' Africa. Under this cloak, the Europeans robbed the continent of vast riches and inflicted unimaginable suffering on the African people.57 " Over fifty years later, his statement is still not out-dated, especially when claiming "it is clear that we must find an African solution to our problems, and that this can only be found in African unity. Divided we are weak; united, Africa could become one of the greatest forces for good in the world.58 " To date, Nkrumah's visions of African unity have not been fulfilled, in fact, according to

Bachmann & Sidaway his visions have amounted to little more than the continued aspirations of the AU.59

The Pan Africanist movement of the 1940s and 1950s, which ignited the drive for African integration resulted in the establishment of the OAU, the Organization of African Unity, which was replaced by the African Union as we know it today in 2003.60 The integration vision, fuelled by the establishment of the OAU, played out at two levels: First, continental organisations partly unified where there has been unequivocal politics, and second, several economic sub-regional arrangements focussing on intra-regional trade promotion have emerged, eight of them officially recognized by the AU.61

Following the examples of the EU, ASEAN and NAFTA inter alia, many African states started new initiatives and boasted regional schemes in the recent past, such as Arab-Maghreb Union (UMA) in North Africa or the Southern African Development Community (SADC).62

The East African Community

History and the original EAC

The history of economic and political integration in Africa started during colonial rule: a number of kingdoms in different parts of the continent extending over territories covering the present-day boarders of multiple African states were relatively well integrated, allowing some limited trade and free movement of factors of production in the nineteenth century already.63 The impetus for today's regional integration efforts in Africa lies in its colonial history: protectorates were administered jointly, in order to lower administration costs, thus colonial rulers throughout Africa spurred regionalism through free trade, common currencies and services.64 In much of colonial Africa, only a very thin line of colonial control existed. For example, the ten million people of northern Nigeria were administered by nine European administrators under Frederick Lugar and a regiment of the West African Frontier Force consisting of 3,000 African troops under the command of European officers.65 The Sudan Political Service consisted of 140 officials ruling over nine million people and 206 colonial administrators ran the entire French Equatorial Africa in the 1930s.66 The French, the British and the Belgian rulers alike administered their colonies efficiently: French West Africa, comprising eight territories and 15 million people was managed by 285 administrators, British Tropical Africa, comprising 43 million people administered by 1,200 staff and the Congo in 1936 was administered by 728 white men.67 Colonial administrators were spread over vast stretches of Africa and ruled "their" domain with absolute power, functioning simultaneously as police chief, judge, tax collector, head of labour recruitment inter alia.68

Numerous Regional Economic Communities (RECs) were established in the 1970s, 1980s and 1990s:

[...]


1 Bitala, M. (2008) „Ostafrikanische Erfahrungen" Vienna, Picus Verlag, p.10.

2 Ibid., p.10.

3 Kaberuka, D., available at http://www.trademarkea.com/african-economic-integration-time-to- raise-the-bar/ Last accessed 11 August 2014.

4 Basedow, J. (2003) "Worldwide Harmonisation ofPrivate Law and Regional Economic Integration-General Report" Uniform Law Review 8 p.35.

5 Kjaer, A. M. (2004) "Old brooms can sweep too!'An overview of rulers and public sector reforms in Uganda, Tanzania and Kenya" journal ofModern African Studies, 42 p.402.

6 Odhiambo, W. & Kamau, P. (2003) "Public procurement: lessons from Kenya, Tanzania and Uganda" 208 OECD Publishing, p.42.

7 Hutchinson, T. (2013) Doctrinal Research: researching the jury, in WATKINS, D. & BURTON, M. (eds). "Research Methods in Law. Abingdon." Routledge p.9.

8 COWNIE, F. (2004) "Legal Academics: Culture and Identities," Oxford, Hart Publishing p.55.

9 Ibid. pp.50-51.

10 Sideri, S. (1997) "Globalisation and regional integration" The European lournal of Development Research, 9(1) p.38.

11 Baldwin, R. (2006) "Globalisation: the great unbundling (s)" Economic Council ofFinland, p.4.

12 Definition of globalization, available at

http://www.businessdictionary.com/definition/globalization.html Last accessed12 June 2014.

13 What is globalization?, available at http://www.globalization101.org Last accessed 12 June 2014.

14 Sideri, S., Op. Cit., p.38.

15 Taylor, I. (2005) "Globalisation studies and the developing world: making international political economy truly global" Third World Quarterly, 26(7) p.1026.

16 Mann, M. (1997) "Has globalization ended the rise and rise of the nation-state?" Review of international political economy, 4(3) p.478.

17 Ibid., p.478.

18 Malamud, A. & Gardini, G. L. (2012) "Has regionalism peaked? The Latin American quagmire and its lessons" The International Spectator, 47(1) p.118.

19 Ibid., p.118.

20 Definition ofEurosclerosis, available at

http://www.investopedia.com/terms/e/eurosclerosis.asp Last accessed 14 June 2014.

21 Malamud, A. & Gardini, G. L., Op. Cit., p.118.

22 Ibid., p.118.

23 Ibid., p.118.

24 Ibid., p.118.

25 Slaughter, A. M. (1997) "The real newworld order” Foreign Affairs, 76(5) p.183.

26 Ibid., p.183.

27 Ibid. p.195.

28 Basedow, J. (2003), Op. Cit., p.35.

29 Ibid., p.35.

30 Ibid., p.37.

31 Mann, M., Op.Cit., p.472.

32 Ibid., p.472.

33 Mwapachu, J. V. (2012) "Challenging the Frontiers of African Integration, The Dynamics of Policies, Politics and Transformation in the EastAfrican Community" Dar es Salaam, Vision Publishing, p.8.

34 LeRoy Bennet, A. & Oliver, J. K. (2002) "International Organizations: Principles and Issues" New Jersey, Pearson Education, p.2.

35 Ibid., p.2.

36 Armstrong, J. D., Lloyd, L., & Redmond, J. (2004) "International organisation in world politics" Basingstoke, Palgrave Macmillan, p.1.

37 Ibid., p.1.

38 Ibid., p.1.

39 Ibid., p.1.

40 Ibid., p.1.

41 Ibid., p.1.

42 Ibid., p.1.

43 Ralston, J. H. (1919) "A League OfNations" The Advocate ofPeace (1894-1920), 81(3) p.73.

44 LeRoy Bennet, A. & Oliver, J. K., Op. Cit., p.28.

45 Ibid., p.28.

46 Archer, C. (1992) "International Organizations" London, Routledge, p.3.

47 Ibid., p.15.

48 Ibid., p.23.

49 Ibid., p.23.

50 Olivier, G. (2010) "Regionalism in Africa: cooperation without integration" Department of Political Science, University ofPretoria, p.17.

51 Ajulu, R. (2005) "THE MAKING OF A REGION, The Revival of The EastAfrican Community" Midrand, Institute for Global Dialogue, p.18.

52 Ibid., p.18.

53 Ibid., p.18.

54 Ibid., p.18.

55 Olivier, G., Op. Cit., p.17.

56 Ibid., p.17.

57 Nkrumah, K. (1961) "I SpeakofFreedom 1.

58 Ibid.

59 Bachmann, V. & Sidaway, J. D. (2010) "African regional integration and European involvement: external agents in the East African Community" South African Geographical Journal, 92(1) p1.

60 Mwapachu, J. V., Op. Cit., p.8.

61 Ibid., p.9.

62 Nying'uro, P. O. (2005) "The EAC's Prospects on the Global Stage" in Ajulu, R. (Ed.) "THE MAKING OF A REGION, The Revival of The East African Community" Midrand, Institute for Global Dialogue, p.31.

63 Kimbugwe, K., Perdikis, N., Yeung, M. & Kerr, W. (2012) "Economic Development Through Regional Trade: A Role for the New East African Community?" Basingstoke, Palgrave Macmillan, p.34.

64 Ibid., p.34.

65 Meredith, M. (2005) "The fate of Africa: A history of50 years of independence" NewYork Public Affairs, p.5.

66 Ibid., p.5.

67 Ibid., p.5.

68 Ibid., p.6.

Excerpt out of 69 pages

Details

Title
The East African Community (EAC). The difference between theory and practice based on the example of the free Movement of Goods and Services
College
University of Sussex  (School of Law, Politics and Sociology)
Course
International Law
Grade
65%
Author
Year
2014
Pages
69
Catalog Number
V304322
ISBN (eBook)
9783668029569
ISBN (Book)
9783668029576
File size
676 KB
Language
English
Notes
Thus far, the dissertation at hand is the very first academic paper dealing with the East African Community's common market, emphasizing on the free movement of goods and services and its implementation. It offers a unique insight into East Africa's regional integration in the past, present and future. 65% (upper second class) ~ 2,0 (German grading system)
Tags
east, african, community, movement, goods, services
Quote paper
Maximilian Haller (Author), 2014, The East African Community (EAC). The difference between theory and practice based on the example of the free Movement of Goods and Services, Munich, GRIN Verlag, https://www.grin.com/document/304322

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