With the grand aim of forming a continental economic community (African Economic Community) in the future, African countries aspire to use the various regional economic communities as building blocs. Is as old as the Organization of African Unity now renamed as African Union, recent summits have reaffirmed Africa’s commitment toward boosting intra-Africa trade and integration. These can include the importing firm being required to obtain various licences and permits.Africa has witnessed various efforts of economic integration at the continental and regional levels. Administrative barriers - countries or regional blocs can also use a range of administrative or legal devices to slowdown imports and to add costs.Embargo - imports from certain countries are completely prohibited.Domestic employees might enjoy more wages and job security, but domestic taxpayers are footing the bill for this. Foreign consumers will enjoy increased economic welfare as the price of their purchases fall.
#Regional economic integration blocs free
While they may understand that free trade will benefit everyone, they may be suffering some of the costs associated with trade and feel that they want to restrict aspects of trading activity. Protectionism arises because countries may not always feel that they benefit from completely free trade.
Increased competition leading to job losses in some domestic industries.Loss of national power in favour of even bigger government.Loss of sovereignty, independence, and national identity.Trade creation-the elimination of protectionism increases trade, leading to a more efficient allocation of member state resources.The promotion of democracy and liberalisation.Improving environmental and social conditions.Freedom of movement of goods and peoples.Larger markets and customer base allows businesses within member countries to exploits economies of scale.There are many theoretical advantages and disadvantages that come with regional integration, As a result it is difficult for any country to survive outside one of these blocs and the world is splitting into expanding groups of trading nations promoting free trade between themselves, at the same time as they are restricting it to those countries outside of their blocs.
However, non-members of trading blocs are facing with financial and non-financial restrictions on their exports to these blocs, such as tariffs, quotas and even embargoes.
The purpose of creating trading blocs is to reduce or eliminate unnecessary trade barriers between member states, and to allow the free movement of goods, services, labour and capital.
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