Vertical integration is a supply chain management style that many businesses decide to use. It can also ease the constraints faced by many firms in … These case studies encompass three different sub-regions that vary in their level of regional integration. The relationship between resources, regional integration and diversification is twofold. Regional integration is essential here as well, since goods, services and people need to be able to flow seamlessly across borders to reduce costs and to help firms become competitive enough to link to these value chains. Regional economic integration refers to agreements between countries in a geographic region to reduce, and eventually remove, tariff and non-tariff barriers to the free flow of goods, services, and factors of production between each other" (Hill, 2004). This site uses cookies to optimize functionality and give you the best possible experience. Currently, weak enforcement of existing treaties and non-tariff barriers continue to hinder free movement of goods, services and persons across borders. The Organization of African Unity and its successor, the African Union, have championed continental cooperation since the 1960s, culminating in the signing of the Abuja Treaty in 1991. Ensuring that regional economic integration succeeds in Africa is very important, not only because of the prospective benefits mentioned above, but also because the policies that are required to ensure its success are the same as those needed if Africa is to benefit from the (6 marks) Suggest two ways in which the government of your country may demonstrate the spirit of cooperation in the event of an environmental disaster in the region. In fact, we have been fighting for the idea of integration for the most part of the last five decades and have, arguably, made some successes towards its attainment. Through our research and the recommendations provided in the report, we show that regional integration is still relevant for Africa’s resource-rich countries – and that it is more crucial than ever before for diversifying countries’ economies as the global commodity supercycle comes to an end. It highlights the importance of structural funds financed by customs and taxation revenues to assist weaker partners in the integration scheme to ensure an equitable distribution of the gains of regional integration. If you continue to navigate this website beyond this page, cookies will be placed on your browser. It can also ease the constraints faced by many firms in gaining access not only to demand for their products but also to the essential services and skills that they need as to boost productivity and diversify into higher-value-added areas. Photo credit: World Bank . Finally, it recommends that integration should take account of existing infrastructures, trading and production links. There is no shortage of books and papers on the benefits of regional integration between countries. This followed the launch of an African Common Passport in July 2016. In view of this, it is appropriate to briefly reexamine why regional integration is pursued, what is understood by regional integration and pre-conditions and principles for regional integration in sub-Saharan Africa. Because stronger regional economies will have the confidence and capacity to compete effectively in volatile and competitive global markets, the development of solid links between countries in a region-and larger and more affluent markets outside the region-can help raise standards and create incentives for deeper regional integration. They are assessed through a framework that organizes the most important policy questions and leads to a number of concrete recommendations for national and regional policymakers. To accelerate the integration, the priority of economic integration must be balanced by those of social, cultural and political integration. Designing and building such infrastructure and a regulatory environment in a multi-country context is, however, very complex: It involves a wide range of political-economy issues that need to be addressed. (5 marks) Q24: June 2005, Q6 Basic (a) Copy and complete the following table in your answer booklet. Database: Content of Deep Trade Agreements This dataset on the content of preferential trade agreements (PTAs) maps 52 provisions in 279 PTAs notified at WTO signed between 1958 and 2015. These divisions are a constraint to economic growth, … The importance of regional economic integration is a very pertinent issue in Africa, particularly in light of existing political and economic weaknesses. “Potential advantages to the private sector include increasing economies of scale and access to cheaper raw materials and intermediate inputs; better conditions for regional value chains and integration into global value chains,” the ITC says. The deeper integration of regional markets through the elimination of non-tariff barriers can reduce trade and operating costs. Importance of regional and continental integration for Africa’s development, Macro-economics Policy, Forecasting and Research, Independent Development Evaluation (IDEV). A dispute settlement mechanism, similar to that set up by the World Trade Organization is embedded in the agreement. Secondly, regional integration implies the lowering of barriers to trade, thus benefiting the economy and increasing the well-being of the member states’ citizens. Regional economic integration refers to the agreement amongst countries within a certain geographic area for reducing and ultimately removing tariff barriers, making sure there is better flow of services or goods through the respective nations. Natural resources management, particularly in the extractives industry, can make a meaningful contribution to a country’s economic growth when it leads to linkages to the broader economy. Why regional integration is so important for resource-driven diversification in Africa. Regional integration is when a group of countries get together and develop a formal agreement regarding how they will conduct trade with each other. Benefits of Regional Economic Integration. Regional integration helps countries overcome divisions that impede the flow of goods, services, capital, people and ideas. The deeper integration of regional markets through the elimination of non-tariff barriers can reduce trade and operating costs. Regional Integration in Africa Trudi Hartzenberg Trade Law Centre for Southern Africa (tralac) ... important. Non-mining businesses like farms or food traders in sparsely populated or remote areas, for example, would benefit from shared infrastructure, since railways, roads and electricity are all needed to bring goods to markets. Regional value chains in minerals and metals, for example, will create demand for services and goods that feed in to that value chain. The AfCFTA agreement brings together the largest number of countries within a free trade area in the world. There is also a need for a secure environment and the harmonisation of business legislation and regulations. Role of Regional Integration Regional economic integration is fast becoming a major factor in promoting global business. " It proposes to create a single market for goods and services, with free movement of people and investments across 55 countries. A country like India has a varied society and has a large population, so it is a more difficult task to achieve. The African Continental Free Trade Agreement seeks to bring Africa into the global trade environment as one continent rather than as individual countries. Promotion of regional integration remains an important economic and political goal in Africa. Trades in different countries have certain restrictions as well as some tariffs, which can be issued in a very discriminatory manner for sure. Regional integration increase a nation economic activities overall, which in turn raises GDP and can provide better living standards for all citizens within the regional block. April 1, 2011, Harri Daniel, 1 Comment. A deeper integration agenda that includes services, investment, competition policy and other behind-the-border issues can address the national-level supply-side constraints far more effectively than an agenda which focuses almost exclusively on border measures. Another key concern is that integration must be people-centred, with stronger citizens’ partnerships, especially among Africa’s burgeoning youth population, private sector players and civil society institutions, in order to ensure sustainable development. One South Asia The World Bank Group supports greater cooperation and regional economic integration in South Asia. Beyond lifting people out of poverty and invigorating Africa’s growth trajectory, the ITC observes that the African private sector will be the key beneficiary. Opportunities from regional integration is that the effect of a large market will increase global.! Hinder free movement of goods, services, with free movement of people and ideas international Centre... 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