While trade preferences in favour of African countries have not worked at all, there is no risk of preference erosion through the liberalization of the most favoured taxation. The ability of African countries to take advantage of trade preferences appears to vary. For example, in the case of textiles and apparel exports to the United States under AGOA, several African countries – namely Lesotho, Swaziland, Kenya, Madagascar, Mauritius and Namibia – have been able to significantly increase their exports, while many others have not demonstrated such a capability. Member States of a customs unionA customs unionA customs union is an agreement between two or more neighbouring countries aimed at removing barriers to trade, reducing or eliminating customs duties and abolishing quotas. These unions were defined by the General Agreement on Tariffs and Trade (GATT) and constitute the third stage of economic integration. Removal of barriers to trade between them and adoption of common barriers to foreign trade. It is estimated that by creating larger markets, RTAs will enable African countries to achieve economies of scale and enhance domestic competition, increase returns on investment and thus attract more foreign direct investment (FDI).12 Africa could reap most, if not all, of these benefits through unilateral liberalization and/or participation in WTO-sponsored multilateral liberalization (Oyejide, 1997). African leaders also believe that RIOs would increase their bargaining power in international trade negotiations and that trade integration would help reduce regional conflicts. Regional trade integration in the EU and East Asia is two successes. However, the two regions have taken different paths to success: EU integration has been driven by formal institutional arrangements, while East Asia`s integration has been the result of “natural” market forces.
However, both stories underscore the importance of economic start-up conditions and the sustained reduction of most favors for foreign trade barriers. The European Union, which succeeded the European Economic Community (EEC) founded in 1957, has always pursued not only the elimination of barriers to trade between its Member States, but also the elimination of barriers vis-à-vis third countries. Prior to the establishment of the EEC, tariffs were high in its home members and there were non-tariff barriers to trade. Successive rounds of multilateral trade liberalization under the auspices of GATT and its successor, the WTO, have reduced the most favoured average tariff on industrial enterprises to about 4%, although tariffs on agriculture remain high (22%). In 1957, intra-Community trade already covered about 30% of its total trade. The creation of the EEC led to a sharp increase in intraregional trade and by the early 1970s intra-Community trade had reached 60% of total EC trade. While intra-regional trade has increased, trade with the rest of the world has also increased, albeit at a slower time. Starting with trade, the EU has successfully moved towards deeper economic and political integration and has expanded its membership over time. Successful economic integration has also contributed to greater regional stability. Document search online General documents on regional trade agreements are coded as WT/REG/*. As part of the Doha Agenda trade negotiating mandate, they use TN/RL/* (where * assumes additional values).