Trading blocs and Economic Integration

A trading bloc: 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 several regional trading blocs.

East African Community (EAC)

1. The nations involved in the trading bloc 
• Republic of Kenya
• Republic of Rwanda
• Republic of Tanzania
• Republic of Burundi
• Uganda of Uganda
  
2. Identify the kind of trading bloc (customs union, free trade area, common market, monetary union)
• EAC is a customs union- a type of trade bloc which is composed of a free trade area between the member countries, that have agreed to a common external tariff with respect to imports from the rest of the world.
  
3. The impact that membership in the trading bloc has had on the economy of one member nation.
• Rwanda’s Minister for East African Affairs, Amb. Valentine Rugwabiza, has said the country is already reaping benefits of being part of the East African Community, seven years since becoming a member. During the past few years since Rwanda joined the EAC, the investments coming from the region have consistently increased. Businesses from Kenya have invested in Rwanda more than US$450 million which has contributed to the creation of thousands of jobs. Yet they have not made such impressive progress regarding trading across borders, and this doesn't depend solely on them; it has to do with how long it takes to cross those borders, cost of transport and of course non tariff barriers. Even though tariffs between the countries have been removed as they are in a customs union, different non-tariff restrictions keep popping up.
  
4. An example of trade creation and trade diversion (appropriate charts)
   
   
   Kenya exports approximately three-fifths of its goods to Uganda and Tanzania, but had been facing tariffs of between 10 and 20 per cent before the establishment of the East African Community. In September 2014 Tanzania became the largest export destination of Kenyan goods within East Africa. The long-held perception by Uganda and Tanzania that Kenya's economy - mainly the manufacturing sector - was more competitive than theirs - causing production to go from higher to lower cost - more efficient. GRAPH COMING AND DIVERSION EXAMPLE TOO