Yesterday, August 1, 2011, I published in Ugandans at Heart Forum an article titled “EA Federation: old idea, slow progress”. It generated comments I received privately calling for further elaboration why I think East African economic integration and political federation need to proceed cautiously and slowly. And why economic integration should precede political federation. Lessons from Europe may help to understand the intricacies of integration and union.
The implementation of a united Europe idea governed by supranational institutions and laws is an old one. It goes as far back as Roman or Charlemagne Empire. Some have recalled the good old days when the whole of Christian Europe had been one nation. The benefits of a united Europe have been presented and the policy of “little steps” to achieve it recommended. Napoleon unsuccessfully attempted to achieve European Union by force. And even Hitler’s New Order sought to unite Europe.
The idea of European unity gathered momentum towards the end of WWII. In 1943 Jean Monnet, French economist called for the formation of European cooperation that would bring about prosperity and social progress. In 1946 Winston Churchill in a Zurich speech called for a new spirit of cooperation in Europe.
The USA Marshall Plan which was implemented after WWII under the Organization for European Economic Co-operation (OEEC) called for European states to work together. When the plan ended some Europeans (maximalists) wanted OEEC to be retained and even enlarged, others (minimalists) expressed reservations and opposed it. For example, British leaders, while welcoming European cooperation, argued that they had close ties with Commonwealth and wanted a revival of world trade. Consequently they preferred a flexible policy and did not entertain a European customs union. Other unsettling political issues including national sovereignty undermined the euphoria and the original impetus of European unity petered out.
However, some economic arrangements were entered into on a small scale. In 1947 the Benelux Union was formed, bringing together Belgium, Luxemburg and Netherlands into a customs union. In 1951 France, Germany, Italy and the three Benelux countries formed the European Coal and Steel Community (ECSC) to pool their coal and steel resources. The success of ECSC formed a basis for the creation of the Rome Treaty of 1958. The goals of the Rome Treaty which were primarily economic were:
1. Elimination of internal barriers to trade.
2. Common external tariff.
3. Free movement of capital, services, goods and people among member states.
4. Common integrative policies in key areas such as agriculture, energy, fisheries, monetary and regional policies.
The idea of eliminating internal barriers to trade triggered past European thorny political problems including the position of agriculture and protection of small holder farmers and jobs. During the two World Wars, European agriculture was starved of funds resulting in reduced production and dependence on imports that required payment in scarce dollars. Protection of agriculture by member states particularly France with a large population in agriculture at that time could not be ignored. Farming was recognized in the Rome Treaty through the Common Agricultural Policy (CAP). It was also feared by some member states that dismantling internal barriers would undermine domestic manufacturing industries.
The admission into the European community of less developed countries raised the fear that they would not compete in a free European market. The countries that could not compete were compensated through a generous program of community transfers and capital investments. These arrangements provided infrastructure and education facilities that made these recipient countries competitive.
The movement of people in the community countries began in the mid-1980s when Belgium, Germany, France, Luxemburg and the Netherlands signed the Schengen Agreement. They committed themselves to gradual removal of checks at their common borders. Under the Amsterdam Treaty which came into force in 1999, the Schengen provisions governing free movement of people and common police and border controls were extended to other community members but special provisions were applied to some member countries.
The points being made here are:
1. The process of integration has been done in phases of “widening” through admitting more democratic member states (the European Union started with six members) and “deepening” through economic, institutional and political integration. The deepening process began with steps initiated towards inter alia a monetary system with fixed exchange rates, direct elections to the European Parliament and implementation of European foreign policy.
2. The process which began in earnest after WWII – 68 years ago – is still far from complete. It remains to be seen whether or not a truly economically and politically integrated Europe will occur. In some states, concerns still remain about the incremental loss of national sovereignty with each new step toward integration.
3. The future of Europe will also be influenced by ongoing debate between integrationists and decentralists. The latter group hopes that it will halt the advance of centralization and preserve national and regional rights.
Negotiations regarding economic integration and political federation in East Africa need to draw lessons from the cautious, incremental and sequenced approach towards European Union. Fast track political federation negotiations being pursued among the East African states need to be reviewed in view of serious concerns that are being expressed. There is not enough information to form a basis for taking an informed decision. Economic integration and political federation are good ideas but could backfire if not handled properly.
Eric Kashambuzi
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