Factors That Explain the Low Intra-EAC Trade For the Period between 2010 and 2017: A Case Study of Kenyan Exports

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Abstract:

The East African Community (EAC) has taken a step forward by implementing a free trade area, customs union and a common market in its region. It is also on the journey of achieving an economic union and eventually a political federation. This implementation of the former requires the removal of all trade barriers in the intra-regional trade. The EAC region has incorporated the removal of trade barriers for efficient regional integration among the member states. However, the region has registered low trade in the past eight years. This study is defined by two objectives: To examine why Kenyan export products are experiencing contraction within the intra- EAC trade integration and to evaluate why the level of intra-EAC trade is still low despite the decrease of trade barriers. To explain the process of regional integration, the study has used the concepts of rational choice institutionalism and historical institutionalism. Secondary data using qualitative methods was used to answer the research questions of the study. The study found out that, several factors accrue to the low intra-EAC trade in the region. These includes: competition of Kenyan products by cheap foreign investor products, availability of NTBs, multiple memberships, disparities in tax regimes, underdeveloped telecommunications and infrastructure, corruption, revenue losses and border inefficiencies, partial harmonization of trade rules and states reluctance to surrender their authority to the common market. The study further offers recommendations for the findings and provides suggestions for further research study.

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Factors That Explain the Low Intra-EAC Trade For the Period between 2010 and 2017: A Case Study of Kenyan Exports

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