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agreement among its Member States. Although there are some differences in AEO practices
among the EU nations, still they are acting as a single AEO that signs MRAs with other
countries.
The level of regional economic integration and the high degree of regional consistency
supported by regulations make the EU a distinct case. However, it is still possible to design a
regional AEO program as it is in East African Community, where an OIC member state, Uganda,
is a participant. EAC countries, namely, Kenya, Tanzania, Rwanda, Uganda and Burundi,
achieved enhanced cooperation on Customs policy and procedure, with harmonized AEO
practices.
Designing a regional AEO brings together the countries with utmost economic relations and
decreases the administrative cost of individually designing an AEO and makes the capacity
building initiatives in the region easier with improved cooperation among the Customs.
Moreover, particularly for small countries, the interest of companies in joining AEO programs
would be limited due to scarce expected benefits. However, with the regional AEO the
economic benefits provided by the AEO program multiply with the number of participant
countries, which escalates the companies’ desire to hold the AEO status.
As it bares costs for a country to initiate MRA negotiations, they naturally choose the countries
which they have significant economic relations. Therefore, it is much easier to find interested
parties to initiate MRA negotiations for regional AEOs rather than single economies.
Regional MRAs are also an effective way of increasing the benefits of AEO status holder
companies in a fast and efficient way. Although it takes some time for the parties of agreement
to align their rules and regulations as well as application and implementation procedures of
the AEO programs, once the agreement signed, the benefits of a regional MRA will be very
similar to the benefits of a regional AEO. In other words, the regional MRA is more costly
compared to the regional AEO in that the administrative cost of alignment and harmonization
of the AEO program is not relevant in the latter one. Moreover, capacity building is much easier
in the regional AEO programs due to the extensive cooperation of the member states.
Free trade agreements have already signed between the groups of countries around the globe.
The existing FTAs would play the role of necessary infrastructure to create regional AEO/MRA
networks. The examples to plurilateral FTAs are the ASEAN (Association of Southeast Asian
Nations), the GCC (Gulf Cooperation Council), SADC (South African Development Community),
and APEC (Asia-Pacific Economic Cooperation). APEC member states have already started the
regional AEO initiative.
Negotiations regarding free trade agreements as well as regional AEO programs are not
straight forward. The main challenge is the disparate level of development of the AEO
programs. The regulatory framework of the countries also plays an important role in this
process.
Regarding OIC countries, the existing free trade agreements are Agadir Agreement between,
Egypt, Jordan, Tunisia and Morocco; GCC between Bahrain, Kuwait, Oman, Qatar, Saudi Arabia
and the United Arab Emirates; and TPS-OIC (Trade Preferential System among the Member
States of the OIC), which is still not in effect.