South Sudan and the East African Community: Pros, Cons and Strategic Considerations

By Laura Nyantung Beny and Matthew Snyder*

December 26, 2012

Editor’s note: * Laura Nyantung Beny is Professor of Law at the University of Michigan Law School. Matthew Snyder graduated from the University of Michigan Law School with a J.D. in 2012 and is currently an LLM candidate at the Faculty of Law, University of Toronto. This is an abbreviated version of a longer report, researched between 2011 and 2012 by Matthew Snyder and Laura Beny. The longer report is available upon specific request to [email protected].

Introduction

December 29, 2012 (SSNA) — In November 2012, a technical committee of the East African Community (the “EAC”) recommended to the body’s Council of Ministers that South Sudanese admission be delayed until the country is able to satisfy various economic and institutional pre-conditions to membership.^[1] However, there is little doubt that South Sudan will eventually join the EAC. Given that EAC membership is inevitable, we argue that South Sudan should conduct a careful analysis of the implications of joining the EAC and, with its findings in hand, astutely negotiate the terms of its EAC membership.

We first offer a brief overview of South Sudan’s development challenges. Next, we provide a short history of the EAC – its origins, demise and subsequent resurrection – followed by a description of the current EAC framework. We then address potential advantages and disadvantages for South Sudan from EAC membership. Finally, we suggest that South Sudan should carefully study the pros and cons and develop a well-considered strategy to optimize the benefits and mitigate the costs of EAC membership.

South Sudan’s Economy and Development Challenges

South Sudan is very rich in natural resources, including but not limited to oil. However, it faces significant economic challenges that largely stem from the fact that the country overwhelmingly depends on oil for public revenues (98% is the commonly-cited figure) and the fact that the country is land-locked with poor infrastructure.

Pursuant to the “Dutch Disease” process, a massive influx of oil revenues can cause real exchange rate appreciation and thus cause a shrinkage in the domestic tradeable goods sector (i.e., export), while increasing the country’s reliance on imports.  This is detrimental to the country’s trade deficit and to economic diversification. Oil dependence also exposes the economy to international commodity price volatility, negatively impacting South Sudan’s ability to engage in long-term fiscal planning.^[2]

In contrast, diversification of South Sudan’s economic base will generate substantial benefits, such as increased employment and income opportunities in urban and rural areas and lower consumer prices.^[3]

Economic theory and evidence underline the importance of export-led growth. Such growth is most effective when it centers on sectors in which the country has a competitive advantage, meaning it can produce those goods at relatively lower opportunity cost than its trading partners. In South Sudan, one of the most promising sectors is agriculture.  The country’s “green belt” provides a fertile ground for a productive agricultural sector. 

Not only would development of the agricultural sector contribute to export-led growth, but it would increase South Sudan’s food security and lower dependence on agricultural imports from neighboring countries, like Uganda and Kenya. It would also create income and employment opportunities in rural areas of South Sudan, which desperately need economic vitalization. Other highly promising economic sectors in South Sudan include livestock, animal products, and timber. Consumer demand for these products, like agricultural goods, is high in the region.^[4] National investment and trade policy should focus on these sectors in which South Sudan has a potential competitive advantage.

However, South Sudan faces considerable challenges in developing these sectors and promoting their exports. Such challenges include real exchange rate appreciation (“Dutch Disease”, as described above), poor transportation infrastructure inside South Sudan and between South Sudan and neighboring countries, and South Sudan’s poor capacity in value-added production. Poor transportation infrastructure increases the cost and time required to export goods abroad. Outdated capital stock and shortages of skilled labor currently hinder development of competitive industries. 

Cross-border trade is also stifled by institutional constraints, such as multiple (and often arbitrary) checkpoints and roadblocks and other burdensome customs regulations. Insecurity, violence and crime also increase the cost of transporting goods. As we explain below, EAC membership could help South Sudan to overcome several of the foregoing hindrances to trade.

A Short History of the East African Community

The current EAC framework dates back to common market structures created by the British during colonial times. The aim was to link the economies of the present day countries of Uganda, Tanzania, and Kenya, the latter occupying a position of prominence within the colonial market system. Following independence, Uganda, Tanzania, and Kenya continued to maintain close ties and, in 1967, entered into a treaty formally establishing the first EAC. 

The main goal of the first EAC was to establish an East African Common Market. To this end, the three members promulgated agreements prohibiting quantitative restrictions on members’ exports and eliminating tariffs on intra-member trade. The first EAC also provided for coordinated efforts towards external trade, including a common external customs tariff and limitations on members’ ability to enter into trade agreements with non-member countries.

While the main focus of the first EAC was economic, members also envisioned it as a pathway to wider regional integration. For instance, the first EAC supported the common provision of certain services to member countries through the development of regional corporations such as East African Airways, East African Telecommunications, and East African Railways.

EAC members also envisioned that certain national governmental functions would eventually be delegated to common administrative organizations like the East African Customs and Excise Department, East African Income Tax Department, and East African Civil Aviation Directorate. They also discussed possibilities for harmonizing fiscal and monetary policies and creating an East African Authority to perform the Community’s executive functions. Indeed, some countries viewed the first EAC as a stepping-stone towards comprehensive Pan-African integration.

The first EAC was also designed as an instrument to promote regional development.  The organization institutionalized a system of unequal resource distribution in order to bring all member countries to the same level of development. For instance, notwithstanding provisions forbidding intra-member tariffs, less developed members were permitted to impose a transfer tax on manufactured goods in order to remedy trade deficits vis-à-vis more developed members. In addition, the East African Development Bank (EADB), an institution created to provide financial and technical assistance to members and help promote development efforts, was required to invest a greater percentage of its funds in less developed members’ projects.

While the first EAC was initially viewed as a great success, it gradually atrophied amid disagreements over unequal distribution of economic benefits, administration of common services, and differing political ideologies. The first EAC collapsed in 1977, reversing regional integration at great expense to the former members.

Aspirations of regional integration eventually resurfaced as the region returned to stability. Such aspirations were eventually solidified in 1993 when the Presidents of Kenya, Tanzania, and Uganda signed the initial protocols to revive the EAC. The EAC was officially re-established through creation of a Secretariat in 1996 and completion of the Treaty for the Establishment of the East African Community ("The EAC Treaty") in 1999. 

Following ratification by the three member states in 2000, the EAC was inaugurated in 2001 and was expanded to its current five-country membership through the accession of Rwanda and Burundi in 2007. As of 2010, the Community represented a single market of around 133.5 million people with a total output of 74.5 billion USD. Current members include Kenya, Uganda, Tanzania, Rwanda and Burundi. South Sudan is expected eventually to join.

Like the first EAC, the goals of the current EAC extend beyond the economic sphere. According to the EAC Treaty, integration includes “cooperation among the Partner States in political, economic, social and cultural fields, research and technology, defence, security and legal and judicial affairs"^[5]  We shall focus on the EAC’s framework for trade cooperation: the Customs Union.^[6]

Current EAC Framework for Regional Trade Integration: Customs Union

The EAC has moved towards trade integration through the establishment and partial implementation of a Customs Union.^[7] The Customs Union is jointly administered through a decentralized administrative structure. While national authorities in each EAC member country oversee functions such as revenue collection, a central administrative body established under the EAC Secretariat is tasked with setting common policies. 

The purpose of the Customs Union is to promote efficient production within the EAC; liberalize trade among EAC members; enhance domestic, intra-EAC, and foreign investment in member countries; and promote economic development and diversification within the EAC.^[8] EAC Customs Union agreements^[9] have established several mechanisms for implementing the Customs Union, including a Common External Tariff (CET), gradual elimination of internal tariffs and non-tariff barrier regulations, among others.^[10]

• Common External Tariff (CET)   

Pursuant to the Customs Union, goods imported into the EAC from outside the EAC are subject to a Common External Tariff (CET). According to the CET, imports to the EAC are subject to one of three CET rates. First, primary goods and capital goods are not subject to duties.^[11] Second, intermediate goods that require additional processing are subject to 10 per cent tariff rates. Third, finished goods that require no additional processing before consumption are subject to 25 per cent tariff rates.^[12]

In addition, EAC partner states have agreed on a list of sensitive products produced and exported within the EAC for which importation from outside the EAC could have a negative impact on production within the EAC.^[13]  Goods designated as sensitive face higher tariff rates than other products and such rates are not limited by the standard CET schedule outlined above. As of 2009, 58 sensitive products had been singled out for increased protection and elevated tariffs, which reach 100 percent in some cases (Id.). Examples of sensitive goods include milk and cream (CET rate is 60%), rice (CET rate is 75%) and Sugar (CET rate is 100%).^[14] 

However, goods in transit and some important goods (such as certain medical equipment, seeds, fertilizers, and mosquito nets) are not subject to duties.^[15]  In addition, new partner states entering the EAC may in theory stay application of CETs on a provisional basis^[16] and a framework for granting provisional exemptions from CETs to established EAC partner states also exists.^[17]  These provisions, as we explain below, could be of critical importance to South Sudan.

• Gradual elimination of internal tariffs

Tariffs between EAC partner states are to be eliminated through the EAC Customs Union. However, in recognition of partner states’ differing development levels, the EAC Treaty allowed unequal treatment among EAC members. In addition, intra-EAC tariffs between the three original partner states were gradually, rather than immediately, phased out. Thus, while tariffs on exports between Uganda and Tanzania, and exports from these two countries to Kenya were removed, certain exports from Kenya to Uganda and Tanzania initially remained subject to tariffs. 

Gradual reductions thus allowed the three original EAC partner states time to reduce dependence on tariff collection and provided their domestic industries time to adjust to changes. South Sudan’s EAC negotiators should keep this option in mind, as we note below.

Potential Advantages of EAC Membership for South Sudan

South Sudan’s accession to the EAC could have significant positive economic effects on the region.^[18] For example, South Sudan is one of the most lucrative markets for Ugandan goods and services, and South Sudan’s EAC membership would further expand Uganda’s access. Furthermore, South Sudan’s oil and mineral wealth and agricultural potential may present attractive investment opportunities for the entire region.  

EAC membership also promises many benefits to South Sudan, several of which follow.

• More efficient border clearance and information exchange

EAC integration would result in the harmonization of regional standards and the reduction of customs clearance procedures. As discussed above, regional trade between South Sudan and its neighbors is often constrained by inefficient border clearance procedures. It is also hindered by disparate product standards, and imperfect communication and information exchange between producers and traders on one side and markets and consumers on the other. 

If, as expected, EAC membership results in harmonized procedures, better communications and information exchange, it will make regional trade cheaper and more efficient for South Sudan.

• Lower transportation costs, transit times and dependence on Sudan

A landlocked country, like South Sudan, could greatly benefit from access to deepwater ports and urban population centers in EAC countries like Uganda and Kenya. Uganda, in fact, has begun construction of a railroad linking Kampala to Juba and Kenya has proposed construction of a regional pipeline to transport oil from South Sudan to Kenyan oil refineries and ports on the coast.^[19] 

Access to other regional corridors through EAC membership could dramatically increase South Sudan’s competitiveness and revenue. Moreover, such access may be essential if the Republic of the Sudan persists in imposing high transport fees on certain South Sudanese exports, particularly oil.^[20]  However, these benefits are contingent on the success of other EAC integration programs, such as implementation of harmonized standards, more efficient customs clearance procedures, and reduction of non-tariff barriers.

• Support for infrastructure and financial development

EAC cooperation programs on the provision of power, transport, and water could spur infrastructure development in South Sudan. The 2006-2010 EAC Development Strategy, for instance, emphasized the importance of adequate and reliable provision of infrastructure "through the sharing of the production, management, and operations of infrastructure facilities." The Strategy also listed energy, road, and information and communication technology infrastructure provision as a priority. Improved physical and information infrastructure would reduce production and distribution costs for South Sudan, making its producers more competitive.

In addition, EAC membership would give South Sudan the ability to join and buy shares in the East African Development Bank (EADB), which would help strengthen the country’s financial infrastructure and provide South Sudanese entrepreneurs with access to technical and financial assistance.^[21] Relatedly, financial services investment from Uganda and Kenya could decrease borrowing costs for South Sudanese entrepreneurs and thereby aid in poverty reduction.^[22] 

• Knowledge transfer to South Sudan from other EAC partners

EAC membership could result in knowledge transfer from partner states to South Sudan. Kenya, for instance, possesses expertise in financial services, while Tanzania has expertise in investment facilitation and Uganda has competence in coffee production.^[23]  Transfer of some of this know-how to South Sudan would aid the development of domestic industries. Finally, educational services investment from EAC partners is likely to increase educational opportunities and the quality of educational instruction in South Sudan.^[24]

• Regional market for South Sudan’s exports and services

EAC membership offers the prospect of an important regional market for South Sudanese exports and services. According to some commentators, Uganda has the potential to become a significant importer of South Sudanese products like coffee and gold.^[25]  In addition, EAC countries are likely to buy South Sudanese oil, if given the opportunity. Regional demand and protective EAC tariffs could also support growth in South Sudan’s agricultural sector, which is critical, as discussed above. Given high CETs on agricultural products, trade among EAC partners is somewhat shielded from non-EAC competition.^[26] 

Moreover, as implementation of the EAC Common Market continues, citizens of South Sudan would benefit from increased employment opportunities in other EAC Partner States, more efficient and harmonized processes for issuing work permits, and freer movement within the EAC.  In addition, increased remittances from more South Sudanese working in EAC countries could help promote rural development and serve as an important source of revenue for rural families. 

• Promotion of investment and competitiveness

EAC membership would support the development of predictable, consistent and transparent regional economic policy frameworks and thus promote investment in the region, including South Sudan. For example, planned harmonization of EAC partner states’ taxes and investment incentives is likely to attract foreign investment.^[27] More generally, greater openness and economic integration may increase South Sudan’s overall economic competiveness.^[28] 

Moreover, various EAC cooperation programs could help increase political stability and improve security in South Sudan, resulting in both economic and non-economic benefits.  In particular, enhanced EAC cooperation to prevent terrorism, armed robbery, and drug smuggling has decreased crime and resulted in increased security in the region.^[29]  Some have also argued that an EAC security infrastructure program currently being discussed could "act as a deterrent against Khartoum’s aggressive stance towards Juba."^[30]  

Other EAC cooperation programs target important issues such as natural resource management and conservation, provision of health services, and food security.^[31]  If these programs increase regulatory harmonization throughout the region, they may reduce the costs of economic exchange between South Sudan and other EAC countries.^[32]

• Positioning of South Sudan as regional corridor for EAC exports to non-EAC countries

EAC membership could position South Sudan as a regional corridor for EAC exports to non-EAC countries. Rwanda, for instance, has predicted that EAC membership will help it become a regional corridor for trade between the Democratic Republic of the Congo (the “DRC”) and the EAC.  Given its location, South Sudan could also become a regional corridor between EAC and non-EAC countries in the region, such as the DRC and Ethiopia. This would allow South Sudan to generate revenue through transportation support services and other related enterprises. 

South Sudan could also possibly become a critical conduit for trade between the region and the Republic of the Sudan, possibly increasing its political and economic bargaining power with its northern neighbor.

• Stronger international negotiating leverage for South Sudan

EAC membership is likely to strengthen South Sudan’s relative position within the world system. EAC membership provides partner states a stronger, collective negotiating position that could result in deeper bilateral and multilateral trade concessions vis-à-vis non-EAC members. The EAC, for instance, is currently negotiating a collective Economic Partnership Agreement (EPA) with the European Union (EU).^[33] The EAC’s negotiating power could also be leveraged in future multilateral and bilateral negotiations, thus resulting in better benefits for all partner states.^[34] Also, as noted above, EAC membership could strengthen South Sudan’s bargaining stance vis-à-vis the Sudan.

Potential Disadvantages of EAC Membership for South Sudan

While regional integration may offer many benefits for South Sudan, there are also several potential disadvantages, a few of which follow.

• Reduction in trade and investment autonomy and tariff revenues

The EAC economic bloc requires uniform standards across partner states. As partner states have differing trade capacities and differing development strategies, compromises are necessary. Uganda, for instance, was forced to adjust its export-oriented growth model and increase its external tariff rates to comply with the CET.^[35]  Kenya and Tanzania, in contrast, were forced to reduce protective external tariffs in response to CET.^[36]

While some reservations and exemptions are possible, South Sudan may need to at least partially adjust its trade, investment, and development policies in response to common EAC goals. In addition, conversion to the CET and elimination of intra-EAC tariffs could result in lost tariff revenue and limit South Sudan’s ability to implement autonomous trade and investment promotion programs.

• Increased prices for critical consumption goods

EAC membership may have negative effects on South Sudanese consumers. For instance, certain products such as rice, fresh and concentrated milk, maize, sugar, and wheat are currently designated as "sensitive" and thus face higher CET tariff rates.^[37]  Higher CETs on imports of such fundamental consumption goods is likely to increase their prices and therefore the cost of living. This effect occurred in Rwanda, especially in urban areas. 

Needless to say, a higher cost of living could make EAC membership politically unpopular among the population.

• Competitive disadvantage of domestic producers and entrepreneurs

The required elimination of intra-EAC tariffs and non-tariff restrictions could result in an influx of goods and services imports from more developed countries like Uganda and Kenya. Domestic producers already have a difficult time competing with producers from other East African countries in production, distribution, and access to finance.^[38] Even the agricultural sector, which has great natural potential, is currently unable to compete with neighboring producers.

And, this effect may be magnified when South Sudan joins the EAC. If so, some domestic producers in South Sudan will lose out.  Some experts, in fact, have expressed concerns that South Sudanese accession to the EAC within a few years of independence would undermine the development of domestic industry.^[39] 

One way that South Sudan might mitigate this effect is by negotiating temporary exemptions to protect emerging domestic industries, as we discuss below.

• Trade diversion rather than trade creation, and limited gains from trade

Some commentators have questioned the utility of EAC trade integration generally, since partner states’ economies are neither very complementary nor very competitive.^[40] As a result, they predict, trade gains from regional trade will be the result of trade diversion rather than trade creation.^[41] If these commentators’ predictions are correct, not all EAC members will benefit from greater trade integration and South Sudan, as a less developed EAC member, may be particularly susceptible.^[42] In addition, some partner states have questioned whether regional markets in the EAC are large enough to support economic growth in the region. Rwanda and Kenya, for instance, have begun to explore parallel opportunities in other regional blocs like COMESA and SADC due to a realization that the EAC market alone may be too small to sustain economic growth.^[43]

Even if South Sudan would gain from intra-EAC trade, non-tariff barriers (NTBs) may limit its realization of these benefits. While low intra-EAC tariffs may promise theoretical trade gains, commentators have noted that actual trade benefits are limited by EAC partner states’ continued use of NTBs.^[44] NTBs in particular have prevented regional welfare gains, employment creation, and poverty reduction from being fully realized and have negatively impacted the flow of goods and services by increasing the costs of intra-EAC trade.^[45]

• Political and economic tensions within the EAC, reducing benefits from integration

Domestic political interests in EAC partner states may complicate EAC integration efforts. In the words of one commentator, "[t]he EAC still suffers from significant institutional weakness, lack of political will and the absence of a shared common vision for its future integration trajectory."^[46]

In fact, EAC partner states’ implementation of certain regional integration programs of potential benefit to South Sudan has been delayed because of domestic political resistance. For example, resistance from local political groups has obstructed implementation of the Common Market Protocol and the resulting free movement of skilled and unskilled labor across partner state borders.^[47]  Implementation of infrastructure cooperation programs has also been slow because of a lack of technical support.^[48]

In addition, regional tensions could also limit the actual benefits of EAC membership. In other words, even if partner states eliminate formal barriers to cross-border trade, the positive effects of such actions may be limited because of disagreements and disputes across borders. Some, for instance, have argued that some South Sudanese harbor a strong distrust of Ugandan traders.^[49]  Specifically, commentators note that many South Sudanese feel that they are unable to profit from trading opportunities because the market is dominated by Ugandans.^[50]  Thus, even if formal barriers to trade between Uganda and South Sudan were eliminated, such distrust and animosity could constrain the efficient flow of goods between the two countries.

Finally, although unlikely, political differences could eventually lead to the unwinding of regional integration programs, as happened with the first EAC. While integration efforts have been promising, some harmful competition between EAC partner states remains difficult to eliminate.^[51] If the diverging interests of EAC partner states become irreconcilable, reversal of certain integration programs may become necessary. As in the first EAC, this could result in significant costs for EAC partner states.

Recommendation: A Multi-Step Strategy for South Sudan

While the total benefits to South Sudan may be greater than the total costs of joining the EAC, it is by no means certain. Thus, South Sudan should undertake a comprehensive economic analysis to investigate the potential advantages and disadvantages of membership, as well as the country’s likely role as a member of the EAC. To accurately assess the impact of EAC membership and mitigate any negative effects of such membership, we recommend South Sudan to engage in a four-step process, as outlined below. 

• Step 1: Determine the costs and benefits of EAC membership

With regard to accession negotiations, South Sudan is potentially at a disadvantage vis-à-vis other EAC partner states. Unlike South Sudan, current partner states have had the chance to incorporate their national interests into common policies, programs, and institutions at earlier stages. With the exception of the Political Federation, negotiations concerning the formation of other institutions (including the Customs Union, Common Market, and Monetary Union) may already be concluded by the time South Sudan joins the EAC. Therefore, accession will likely mean implementation of a variety of agreements that South Sudan was not able to negotiate and that may not be in its best interest. 

As we demonstrate in greater detail in our longer report, Rwanda entered into EAC accession negotiations with a clear understanding of how membership would affect its national priorities, welfare, and capacity. Before agreeing to membership, the country engaged in substantial research to determine the economic and non-economic opportunities and losses that could result from EAC membership. After such studies, Rwanda decided that EAC membership would on net facilitate and promote its national policy objectives and took steps to mitigate the costs of such membership. South Sudan would do well to follow suit.

• Step 2: Poll local stakeholders

South Sudan should focus on polling and educating its local stakeholders on the effects of EAC membership, since public support is going to be critical.  To ensure that all aspects of EAC integration are considered and addressed, South Sudan should consult a diverse range of stakeholders, including ordinary citizens, bureaucrats, politicians, business community members, and civil and professional organizations.  As we illustrate in our longer report^[52] each group of stakeholders may have different expectations and fears regarding EAC integration. 

Rwanda provides a useful model. In 2008, the Rwandan government established the Ministry of East African Community ("MINEAC"). MINEAC conducted consultations with stakeholders across the country and engaged in a two-month long sensitization campaign to educate Rwandans on EAC integration and EAC projects and programs. South Sudan could follow a similar approach.

Consultations with local stakeholders could help South Sudan safeguard stakeholder interests as well as lessen any negative impact of EAC membership.  Rwanda, for example, was able to safeguard its local small businesses through identifying and addressing weaknesses in advance of EAC integration, by means of the government’s consultations with stakeholders (see Box 7.2 in our longer report).  

Through stakeholder consultations, Rwanda learned that its small and medium enterprises ("SMEs") were less competitive than those of its regional neighbors and would likely suffer when Rwanda entered into the EAC common market. Consequently, Rwanda established a detailed national SME development policy that focused on strengthening and developing the domestic SME sector in advance of EAC integration.

• Step 3: Devise strategies to mitigate the negative effects of EAC membership

After engaging in a comprehensive study and polling stakeholders, South Sudan may find that EAC membership would be beneficial overall, but detrimental to certain national interests. If so, South Sudan should explore strategies to mitigate the negative effects of EAC accession. In this regard, at least three strategies may be relevant.

First, South Sudan should consider the possibility of offsetting increases in the prices of critical consumption goods through subsidies or other public programs (e.g, tax and redistribution policies). However, such measures will not be feasible if the government of South Sudan continues to be in a financial bind due to a self-imposed oil embargo.^[53]

Second, South Sudan should develop a priority list of national policies and important non-EAC consumer goods and negotiate temporary reservations or exemptions, as other EAC members have done upon joining the EAC. Rwanda, for example, was able to successfully exempt certain non-EAC tariff rates and investment incentive programs during its EAC accession negotiations. 

In particular, Rwanda negotiated a list of specific industrial raw materials, key agricultural products, and other sensitive products for which different tariff rates other than the CET would apply. The country also successfully negotiated the continuation of certain existing investment incentives and facilities for domestic manufacturers and investors.

However, Rwanda agreed that its reservations and exemptions would expire in two years after its accession to the EAC when it would be required to fully implement its EAC commitments. Similarly, it is unlikely that South Sudan would receive permanent reservations or exemptions from EAC requirements.

As a third option, therefore, South Sudan might consider gradual implementation of its EAC commitments. Following accession to the EAC, for example, both Burundi and Rwanda were given two years to fully implement their commitments.^[54] 

However, two caveats should be noted. First, given the economic disparity between South Sudan and EAC partner states and the extensive programs to be implemented upon South Sudan’s accession,^[55] South Sudan may desire a much longer implementation period than granted to Rwanda and Burundi. But partner states may be reluctant to agree to this. Second, while delayed implementation would allow South Sudan to mitigate the harmful effects of certain EAC commitments, complete elimination of such effects may be impossible. 

Fortunately, it seems that South Sudan will have more time (albeit by default) to develop its domestic industries before acceding to the EAC. As noted above, an EAC technical team has recently advised against South Sudan’s admission, pending its “setting up proper market and governance institutions[.]”^[56]

South Sudan would be well advised to use the additional time to pursue the necessary economic and governance reforms, as well as to encourage the development of domestic industry.

• Step 4: Determine whether EAC cooperation programs will realistically be implemented 

As discussed above, EAC cooperation programs cover a variety of economic and non-economic issues. If properly implemented, such programs could greatly benefit South Sudan. However, as also discussed, domestic political resistance has delayed or frustrated implementation of several EAC initiatives and programs.

Thus, South Sudan should critically assess the probability that important cooperation programs will be implemented as planned. For programs in which timely implementation is uncertain, South Sudan should determine the extent to which EAC partner states would agree to definite, binding commitments and defined implementation schedules in conjunction with accession negotiations. 

Alternatively, if EAC partner states are unlikely to agree to binding commitments, South Sudan could persuade EAC partner states to incorporate important cooperation initiatives into the multi-year EAC Development Strategy. While such commitments would not be binding, they could nonetheless have an influence on future EAC discussions and spending. 

Conclusion

EAC membership is likely to generate both benefits and costs for South Sudan. It is presently unknown whether the benefits will outweigh the costs. South Sudan should thus carefully study costs and benefits in advance in order to position the country to negotiate membership terms that maximize the net benefit to South Sudanese from joining the regional body. 

References

Beny, Laura Nyantung, If Managed Properly, Oil Need Not be a Curse for South Sudan, Gurtong Focus Magazine, May 2012, available at http://www.gurtong.net/shop-t82/digital-edition.aspx.

Booth, David et al., East African integration: How Can It Contribute to East African Development? (2007).

Bowler, Tim, East Africa’s Common Market Begins, BBC.co.uk, June 30, 2010, http://news.bbc.co.uk/2/hi/business/8769566.stm.

Candia, Steven, Uganda, South Sudan Agree on Highway Patrols, The New Vision (Kampala), June 18, 2012, available at http://allafrica.com/stories/ 201206190368.html.

CUTS International, Taking East African Regional Integration Forward: A Civil Society Perspective (2010).

East African Community Development Strategy 2006-2010.

EAC Grants Rwanda Extension of Duty Waiver on Sugar, EAC.int, June 26, 2012, http://www.eac.int/trade/index.php?option=com_content&view=article&id=144:eac-grants-rwanda-extension-of-duty-waiver-on-sugar&catid=40:press.

East African Community Secretariat, Report of the Committee on Fast Tracking East African Federation ["Wako Report"] (2004).

East African Community, About the Treaty, EAC.int, http://www.eac.int/treaty/index.php.

East African Community, History of the EAC, EAC.int, http://www.eac.int/index.php?option=com_content&view=article&id=44&Itemid=54&showall=1 (last updated June 15, 2011).

East African Community, Towards the EAC Political Federation, EAC.int, http://www.eac.int/federation/index.php?option=com_content&view=article&id=191&Itemid=138.

EADB Plans Entry Into Rwanda and Burundi, East African Development Bank, Dec. 6, 2007, http://www.eadb.org/news.php?newsid=68.

East African Leaders Kick Off Major Infrastructure Project, Voice of America News, Mar. 2, 2012, available at http://www.voanews.com/english/news/africa/east/ East-African-Leaders-Kick-Off-Major-Infrastructure-Project-141181553.html.

East Africa: Rwanda, Burundi join EAC today, Monitor (Uganda), June 18, 2007, available at http://www.afrika.no/Detailed/14421.html.

Edward, Kafeero, Customs Law of the East African Community in Light of WTO Law and the Revised Kyoto Convention (April 2009) (unpublished Ph.D. dissertation, Wilhelminian University of Muenster).

Elinaza, Abduel, East Africa: EAC Inches Towards Monetary Union Stage, Tanzania Daily News (Dar es Salaam), Mar. 16, 2012, available at http://allafrica.com/ stories/201203160224.html

Fitzke, Susan, The Treaty for East African Cooperation: Can East Africa Revive One of Africa’s Most Infamous Economic Groupings? 8 Minn. J. Global Trade 127 (1999). 17

Hitimana, Bosco, EAC Warned on Harmful Tax Race, East African Business Week (Kampala), Aug. 8, 2011, available at http://allafrica.com/stories/201108090814.html.

Jackson, Lagu Joseph, South Sudan, Ethiopia Sign MoU, The Citizen (Juba), Mar. 4, 2012, available at http://allafrica.com/stories/201203051139.html.

Joint Assessment Mission Sudan: Volume III (2005).

Kabeera, Eric, East Africa: EAC Monetary Union Negotiators Set for EU Study Tour, New Times (Kigali), Jan. 14, 2012, available at http://allafrica.com/stories/201201161223.html.

Kabeera, Eric, East Africa: EAC Political Federation Draws Mixed Feelings, New Times (Kigali), Jan. 9, 2012, available at http://allafrica.com/stories/201201090957.html.

Kiragu, Peter, Lamu Port Not a Boon for EAC – US Report, The Star (Nairobi), July 20, 2012, available at http://www.the-star.co.ke/business/local/85916-lamu-port-will-do-little-for-eac-trade-us-report.

Laessing, Ulf, Sudan, South Sudan peace deals include banking, monetary accord, Reuters Africa, Sept. 29, 2012, available at http://af.reuters.com/article/topNews/ idAFJOE88S00P20120929?pageNumber=1&virtualBrandChannel=0.

Langton, Danielle, Cong. Research Serv., RL31772, U.S. Trade and Investment Relationship with Sub-Saharan Africa: The African Growth and Opportunity Act and Beyond (2008).

Maiyo, Josh, EAC: How New Members Will Alter Regional Bloc – Analysis, Pambazuka News, May 3, 2012, available at http://www.eurasiareview.com/03052012-eac-how-new-members-will-alter-regional-bloc-analysis.

Mrindoko, Sebastian, Tanzania: Dar to Explore Business, Investment Prospects in Juba, Tanzania Daily News (Dar es Salaam), Feb. 27, 2012, available at http://allafrica.com/stories/201202270316.html.

Mugisa, Everist et al., East African Community, An Evaluation of the Implementation and Impact of the East African Community Customs Union (2009).

Musa, Ismail, Regional Blocs Threaten Uganda’s Grip on South Sudan Market, Daily Monitor (Kampala), Feb. 8, 2012, available at http://www.tralac.org/2012/02/08/ regional-blocs-threaten-ugandas-grip-on-south-sudan-market.

Musonda, Flora, Regional Integration in Africa: A Closer Look at the East African Community (2004).

Nakimangole, Peter Lokale, South Sudan to Diversify Its Economy, Oye! News from Africa, July 30, 2012, available at http://www.oyetimes.com/news/africa/27050-south-sudan-to-diversify-its-economy.

Nakimangole, Peter Lokale, Monopoly Fears Over S. Sudan Joining East African Community, July 19, 2011, available at http://www.gurtong.net/ECM/Editorial/tabid/124/ctl/ArticleView/mid/519/articleId/5467/Monopoly-Fears-Over-S-Sudan-Joining-East-African-Community.aspx.

Natha, Bernard, Kenya, Uganda salivating at South Sudan prospects, East African News Agency (Arusha), Apr. 5, 2011, available at http://thecitizen.co.tz/magazines/-/9698-kenya-uganda-salivating-at-south-sudan-prospects. 18

Natha, Benard, Road to Political Federation ‘Still Long’, The Citizen (Daar es Salaam), Apr. 20, 2011, available at http://allafrica.com/stories/201104200400.html.

Ngor, Mading, Road-Starved South Sudan eyes a $4 Billion Dollar Road Network, Reuters, Aug. 9, 2012.

Nyanzi, Peter, Sudan Trade Booms Despite Hurdles, The Independent (Uganda), available at http://www.independent.co.ug/business/business-news/5259-sudan-trade-booms-despite-hurdles.

Odipo, Ndira George, Tariff Binding Commitments under the Non-Agricultural

Products Market Access (NAMA) Negotiations: Implications on the East Africa Community Customs Union (Institute of Economic Affairs Research Paper Series No. 23, August 2009).

Omondi, George, EAC Locks out South Sudan and Somalia, Africa Review (Nairobi), Nov. 27, 2012, available at http://www.africareview.com//Business—Finance/EAC-locks-out-South-Sudan-and-Somalia/-/979184/1630142/-/5ny0iaz/-/index.html?relative=true.

Omondi, George, EAC Under Pressure to Extend Special Trade Window, Business Daily (Nairobi), Jan. 21, 2010, available at http://www.tralac.org/2010/01/21/eac-under-pressure-to-extend-special-trade-window/.

Onyiego, Michael, East Africa Eager to Welcome Independent Southern Sudan, Voice of America, Jan. 20, 2011, http://www.voanews.com/english/news/africa/East-Africa-Eager-to-Welcome-to-Independent-South-Sudan-114287394.html.

Protocol on the Establishment of the EAC Customs Union, Mar. 2, 2004.

Revitalizing Sudan’s Non-Oil Exports: A Diagnostic Trade Integration Study (DTIS) Prepared for the Integrated Framework Program (2008).

Ruitenberg, Rudy, South Sudan 470,000-Ton Grain Deficit, Food Insecurity, Bloomberg, Feb. 17, 2012, http://www.businessweek.com/news/2012-02-17/south-sudan-faces-470-000-ton-grain-deficit-food-insecurity.html.

Selassie, Zeru Gebre, Non-Oil Revenue Study: Summary Final Report (Vol. 1, 2009).

South Sudan ‘Free to Join EAC’, The Citizen (Dar es Salaam), July 12, 2011, available at http://allafrica.com/ stories/201107130907.html.

South Sudan Imports 6.4 Million Tons of Items Through Kenya’s Port, Sudan Tribune, Nov. 27, 2011, available at http://allafrica.com/stories/201111280503.html.

South Sudan protests imposition of $22.8 per barrel by the North, Sudan Tribune, July 27, 2011, available at http://allafrica.com/stories/201108020229.html.

Statement by the Right Honorable Prime Minister at Rwanda’s Launching of the EAC Customs Union, July 6, 2009

Strike, Meredith, South Sudan: The South’s Trading Trajectory, The Independent (Kampala), July 8, 2011, available at http://allafrica.com/stories/201107090052.html.

Support to Rwanda’s Accession to the East African Community: Final Impact Report (2007).

Tanzania Refuses to Sign Proposal for EAC Political Federation, East Africa Newspost.com, Nov. 28, 2011, http://www.eastafricanewspost.com/index.php/ east-africa-regional-news/105-tanzania-refuses-to-sign-proposal-for-eac-political-federation.19

Third World Network, Outline of Ways in Which LDCs Can be Affected by EPAs (2011), available at http://www.twnside.org.sg/title2/wto.info/2011/ twninfo110503.htm.

Titeca, Kristof, The Changing Cross-Border Trade Dynamics Between North-Western Uganda, North-Eastern Congo, and Southern Sudan (Crisis States Research Centre Working Paper No. 63, Nov. 2009).

Treaty for the Establishment of the East African Community, Nov. 30, 1999.

UNCTAD, Economic Development in Africa: Strengthening Regional Economic Integration for Africa’s Development (2009).

United Nations Industrial Development Organization (UNIDO), UNIDO Integrated Programme in Sudan: An Industrial Agenda for Poverty Relief and Transition to Sustainable Development (2010).

USAID, South Sudan Transition Strategy 2011-13 (2011).

World Bank, Doing Business in Juba (2011).

World Food Program, Ethiopia Cross Border Trade Update, October 2011, available at http://documents.wfp.org/stellent/groups/public/documents/ena/ wfp242631.pdf.

Yongo-Bure, Benaiah, Economic Development of Southern Sudan (2007)

Yang, Yongzheng & Sanjeev Gupta, Regional Trade Arrangements in Africa: Past Performance and the Way Forward (2005).