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Regionalism, Trade and Development in Africa

Written by: African Development Bank

Article Overview: Regional co-operation, using regional trade groupings or regional economic communities (RECs), has been a dominant feature in the development of trade policy since the end of the Second World War.

Regionalism, Trade and Development in Africa

Regional co-operation, using regional trade groupings or regional economic communities
(RECs), has been a dominant feature in the development of trade policy since the end of
the Second World War. Apart from the tariff reductions negotiated through the General
Agreement on Tariffs and Trade (GATT) and, since 1995, under the World Trade
Organization (WTO), the movement towards economic integration in Western Europe,
Latin America, Africa, North America and Asia has been the most important
development affecting the level and structure of international trade in the post World War
II period. Many believe that integration of the economic (and ultimately political)
systems of nation states is a way of bringing about not only rapid economic growth but
also lasting peace through increased trade.
Jacob Viner’s seminal work on customs union theory titled The Customs Union Issue,
which was published in 1950, has stimulated a lot of intellectual research and interest in
customs unions. However, in practical terms, the European attempt at economic
integration, legalized by the Treaty of Rome in 1957, has been an inspiration and
stimulus to other regions to engage in economic integration. The success of the European
Union (EU), culminating in the single market in 1992 and a single currency in 1999, has
been the envy of other regions. By 1998, a total of 98 regional integration schemes or
agreements were identified but none had developed to the level of the EU.
The concept of international economic integration is central to the issue of regionalism
and regional economic communities. According to Hine (1994), “international economic
integration” describes both a state of affairs and a process. As a state, international
economic integration refers to a fusion of formerly separate national economies while as a process it signifies the gradual elimination of economic frontiers between countries.
Economic frontiers may be defined as any demarcation over which mobility of goods,
services and factors of production are relatively low. Thus, following Iyoha (2004), we
may postulate that international economic integration is the attempt by the governments
of 2 or more countries to link together their economies through the removal of economic
frontiers under specific integration schemes.

African Development Bank
Economic Research Working Paper Series
Enhancing Africa’s Trade: From Marginalization
to an Export-Led Approach to Development
Milton A. Iyoha
Professor, Department of Economics & Statistics
University of Benin, Nigeria
Economic Research Working Paper
No 77 (August 2005)

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Article Tags: africa north, customs union, dominant feature, economic communities, general agreement on tariffs and trade gatt, integration schemes, international economic integration, jacob viner, lasting peace, national economies, rapid economic growth, regional integration, second world war, seminal work, single currency, tariff reductions, treaty of rome, world trade organization, world trade organization wto, world war ii



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