African Trade Integration from an American Perspective

Author: Matt Eiss

As an American living in an age of economic and political strength, it can be easy to forget the difficult questions that our country was forced to make during its fledgling years. The United States and Western Europe have benefitted from the current global system. With the increased efficiency of trade in goods and services between opposite ends of the globe, however, new questions have arisen and new systems of interacting between countries. Regional integration and its economic impacts have become germane in response to this new global environment. Some countries and regions are struggling to find their niche within this globalized economy. The United States (and other successful countries) needs to look back to a foundational period when they were in a similar situation for a more fair economic system.      

Alexander Hamilton in the Federalist Papers (Federalist 12 and 13) wrote about the benefits of a strong union. During the ratification period of the U.S. Constitution, Hamilton fought using pen and paper to argue the benefits of a strong union of states. To paraphrase his economic arguments in The Federalist Papers, Hamilton argues that if the states integrated they could benefit significantly through international trade by having a common external tariff and unrestricted internal commerce between states. Another important aspect was that in integrating, foreign powers could not be used against each other to further their own economic interests and promote distrust between the states.      

There is a modern example that mirrors this quick history lesson in Hamiltonian economic theory. Economic unions are becoming a common form of unification that applies Hamiltonian theory into practice. What Hamilton discussed in terms of a strong central government, is not what “regional integration” means today. Even so, his economic prescription remains valid. African nations are currently playing catch up to the regional trade unification zones that mark the modern macroeconomic landscape. The United States should recognize this line of thinking due to Hamilton’s integral role in developing U.S. economic and political thought.  

It has been especially difficult for African nations to integrate because of the various trade agreements individual African nations have with the EU and the U.S. Recently, African ministers and trade experts on regional integration followed Nigeria’s position against trade liberalization deals with the European Union. African trade leaders argue that if they were to adopt the Economic Partnership Agreements (EPAs) with the EU, their ability to regionally unify economically and develop stronger economies would be hindered. While the idea of EPAs is good in theory and would be beneficial for Africa in the future, it would be detrimental if African nations agreed to them as Africa is currently configured economically. Hamilton, I’m sure, would support giving Africa the time necessary to regionally integrate to create stronger economic trading partners for the EU and the U.S. and strengthening the global economic system.