EXAMINING THE EFFECTS OF POLITICS ON TRADE IN REGIONAL BLOCS’ ECONOMIC INTERGRATION: A CASE OF THE EAST AFRICAN COMMUNITYAND THE EUROPEAN UNION. BY BEATRICE WOGGA ID NO. 626808 A Thesis Submitted to the School of Humanities & Social Sciences in Partial Fulfillment of the Requirement for the Degree of Master of Arts in International Relations UNITED STATES INTERNATIONAL UNIVERSITY- AFRICA SPRING 2019 DECLARATION I, the undersigned, declare that this is my original work and has not been submitted to any other college, institution or university other than the United States International University- Africa in Nairobi for academic credit. Signed: ____________________________________ Date: ____________________________ Beatrice Wogga Student This thesis has been presented for examination with my approval as the appointed supervisor. Signed: _____________________________________Date: ____________________________ Mr. Dan Odaba Supervisor Signed: _____________________________________Date: ____________________________ Dr. Martin C. Njoroge Dean, School of Humanities and Sciences Signed: _____________________________________ Date: ____________________________ Amb. Prof. Ruthie Rono, Deputy Vice Chancellor, Academic Affairs ii COPY RIGHT This thesis research paper has copy right. It should not be reproduced by photocopy or through electronic or print media without author‘s permission. © Beatrice Wogga, 2019 iii DEDICATION I would like to dedicate this project to my husband Dr. Awuor of Kenyatta University for the moral, spiritual and financial support the he gave me. I also thank my friends for their full support in undertaking my Master‘s studies, and in carrying out this thesis research. iv ACKNOWLEDGEMENT I would like to acknowledge the overwhelming support and confidence my reader Professor Cassandra Veney gave me and ensured that I put in more energy to come to this level. I would also like to appreciate my supervisor Mr. Dan Odaba too, for the effort and guidance he offered me in writing this thesis and work. I want recognize all my lecturers who ensured that I put more commitment and effort in making a success to the completion of my studies. Lastly and most, I am greatful to the Almighty God for giving me a sound mind and good health without which I would not have undertaken this theses. v ABSTRACT This study focused on the examining the effects of politics trade in East African Community (EAC) trade and economic integration, with the European Union (EU) examined as setting the pace and can be used as a model in helping other regions to achieve a robust Regional Economic Integration. Regional Economic Integration has enabled countries to focus on issues that are relevant to their state development in many African countries, as well as encourage trade between neighbors. The four main types of regional integration include: Free Trade Area which is the most basic form of economic integration. Members remove all barriers to trade between themselves but are free to independently determine trade policies with nonmember nations of The North American Free Trade Agreement (NAFTA). The second type regional integration is Customs Union which provides for economic cooperation as in free zone. Barriers to trade are removed between the member countries. The primary difference from the free trade area, is that members agree to trade with nonmember states, an example being The Gulf Cooperation Council (GCC) for Arab states. The third is the Common Markets that allows for the creation of economically integrated markets between member countries. Trade barriers are removed, as they are any restrictions on the movement of labor and capital between member countries. Like customs unions, there is a common trade policy for trade with nonmember nations. The primary advantage to workers is that they no longer need a visa or work permit to work in another member country of a common market, Common Market for Eastern and South Africa (COMESA). The fourth main one is the Economic Unions which is created when countries enter into an economic agreement to remove barriers to trade and adopt common economic policies, The European Union (EU), Economic Partnership Agreement (EPA) is a perfect example. This study was guided by the following research questions: What are the effects of politics on economic integration? What are the EAC‘s institutional constraints on trade and economic integration? What lessons can EAC learn from EU on trade and economic integration? The study utilized both qualitative and quantitative approaches. Data presented in this study was gathered from secondary sources, and analyzed using content analysis. The findings in this study have been presented using Tables, Figures and narrative presentation. Lack of political will is seen as a major impediment and hindrance towards a successful EAC trade and economic integration. Secondly, EAC institutional constraints lack authority, and financial resources, making it difficult to execute its mandate. Lessons from EU success include building independent regional institutions, developing consensus on Common Market, Customs Union, Fiscal and Monetary policy, and free movement of people, capital and investments. Regional Trade as a form of Regional Trade Agreement, is therefore seen as a critical factor that can be used as a policy tool to enhance countries globally to advance their industrialization, economic growth, social welfare and sustainable development. It is seen too as a facilitator in escalating trade liberation, which eventually lead to free markets through trade tariffs and non-tariff trade barriers. Although Regional integration is seen as good element in trade, politics also plays a major role in determining how trade agreement will be viewed by nations involved in the partnerships and trade agreements. vi TABLE OF CONTENTS COPY RIGHT ..................................................................................................................... iii DEDICATION ..................................................................................................................... iv ACKNOWLEDGEMENT ..................................................................................................... v ABSTRACT ........................................................................................................................ vi LIST OF TABLES ............................................................................................................... ix LIST OF FIGURES .............................................................................................................. x LIST OF ABBREVIATIONS .............................................................................................. xi CHAPTER ONE ................................................................................................................... 1 1.0 INTRODUCTION ...................................................................................................... 1 1.1 Background ................................................................................................................ 1 1.2 Statement of the Problem ............................................................................................ 9 1.3 Objectives ................................................................................................................ 12 1.4 Research Questions .................................................................................................. 12 1.5 Justification of the Study .......................................................................................... 13 1.6 Scope of the Study .................................................................................................... 13 1.7 Chapter Summary ..................................................................................................... 14 CHAPTER TWO ................................................................................................................ 15 2.0 LITERATURE REVIEW ......................................................................................... 15 2.1 Introduction .............................................................................................................. 15 2.2 Trade and Economic Integration ............................................................................... 15 2.6. Factors that Facilitate Trade and Economic Integration ............................................. 28 2.7. Theoretical Framework ............................................................................................. 30 2.8. Chapter Summary ..................................................................................................... 36 CHAPTER THREE ............................................................................................................. 37 3.0. METHODOLOGY ................................................................................................... 37 3.1. Introduction ............................................................................................................. 37 3.2. Research Design ....................................................................................................... 37 3.3. Data Collection Methods .............................................................................................. 38 3.4. Data Analysis Methods ................................................................................................. 39 3.6. Research Limitations ...................................................................................................