Joining the East African Community in 2007 by the country of a thousand hills (Rwanda) was important for the Rwandese society and its neighbours.
Gaining the full membership of the East African community (EAC) has tremendously linked Rwanda with a broadened market for its goods.
The East African Community (EAC) is a preferential trading area formerly consisting of Kenya, Tanzania, and Uganda. The present members of the East African Community are a revival of the original EAC, a customs union that was established in 1967 at the end of the colonial era for a variety of political and economic reasons.
The new EAC of which Rwanda and Burundi are among the member states is aimed at achieving deeper regional integration among the member states with the establishment of a customs union, then a common market, a monetary union, and ultimately a political federation.
The Rwandan private sector will become competitive in the East African Community as it will have to strive and work hard to attain or surpass the standards of member states in terms of quality and quantity.
One of the tangent benefits is that international economic standards advocate for free movement of commodities and various services. Several trade barriers are stripped off in various business transactions carried out amongst member countries.
It is important to understand that increased trade involvement in international markets is the only sustainable way for developing societies to free them from the poverty tragedy. This is why East African member states came together to form an alliance in order to create a large economic base and trading atmosphere.
Rwanda’s involvement in various alliances such as Comesa and the Commonwealth member countries will increase the country’s competitiveness and attract several foreign investments as well.
The country is also able to benefit from the regional trading arrangements. These regional trading arrangements are important because they alter the prices of imports from members as tariffs are phased out relative to imports from the rest of the world.
Eventually, demand patterns change resulting in adjustments in trade and output flows. The creation of regional trading alliances where there exists overlapping production with significant differences in production costs between members can lead to large gains from trade as resources are allocated more efficiently among member countries.
Trade integration is not the only reason that policymakers in Rwanda might find regional integration in the East African region to be a desirable policy. Other factors such as EAC customs union are very crucial. The Comesa customs union is attractive to Rwanda because it provides a larger market to
encourage the expansion of its manufactured or non-traditional exports to the region. Developing countries can pursue enhanced trading arrangements including outside framework of the regional trade alliances through deepening cooperation in trade facilitation.
Consequently, adopting and implementing simple, transparent import and export
regulations that are efficient procedures for customs clearance will reduce transaction costs and enhance efficiency in EAC member countries and improve the environment for trade expansion.
Today, behind boarder reforms are are increasingly an important part of the
international trade architecture and of growing importance in the multilateral trade negotiations in the world trade organization.
Regional cooperation on public goods such as water basins (lakes, rivers), infrastructure (roads, railways, and dams), the environment, hydroelectric and other sources of energy, and fisheries can generate benefits for member states.
It can be stressed here that trade creation means the import competing sectors will face increased competition from cheaper imports, and producers will have to improve efficiency and competitiveness.
Sustained macroeconomic and structural reforms will be needed to ensure that a favorable enabling environment is created that will facilitate competitive production.
With the above discussion, one can conclude that improvement in trade facilitation can improve transparency, reduce the costs of doing business, and promote trade.
Regional cooperation in implementing border reforms is an increasingly important part of the architecture of the international trading system that can improve efficiency and facilitate trade in goods and services.
Finally, regional cooperation in public goods can, among other things, lower the cost of infrastructural development, promoting growth and development.