Regional Economic Integration: Prevalence of Institutional-based Trust and its use to enhance Trade

Abstract

Regional Integration (RI) has been a growing phenomenon in the last decades because the benefits associated with it, particularly in terms of trade. Despite the benefits, the issue of Non-Tariff Barriers (NTBs) has become a major concern, thus triggering a number of trade disputes among nations. To improve trade relationship with one another, three African regional trade blocs, namely, Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and the Southern African Development Council (SADC) entered into an agreement to form a single market through launch of a grand Tripartite Free Trade Area (FTA). An important issue that followed this agreement was the use of an On-line Complaint Reporting, Monitoring and Eliminating Mechanism starting in year 2009 and formally launched in June 2011. This mechanism was meant to enhance transparency and easy follow-up of reported and identified NTBs from participating members and would possibly reduce complaints. Despite this launch, a review of the website indicates surfacing of new NTBs and even some recurrence previously reported ones. The online reporting mechanism has become a paradox. Complaints have continued to proliferate in different forms, hence NTBs that destabilize the objective of realising free trade in the COMESA, EAC and SADC area. Trust Theory is used to help understand the main cause/source of many complaints and the resultant NTBs. The subsequent implication of these NTBs on the status of trade among the concerned economies also needs investigation. Complaints registered on-line in COMESA, EAC and SADC Website from 2009 to 2017, are used as data for the study . This paper, contributes to knowledge by enabling understanding of trust in regional integration literature and future prospects of this on-line reporting mechanism.