The Customs Union, the first pillar of EAC integration, is defined under Article 75 of the Treaty. It came into effect, in 2005 having been signed by the three East African Heads of States on 2nd March 2004 in Arusha, Tanzania. The Republics of Rwanda and Burundi joined the Customs Union in 2008 and started applying its instruments in July 2009. In the theory economic integration, a Customs Union is supposed to be the third stage of integration after a Preferential Trade Area and a Free Trade Area. However the Treaty establishing the EAC provides that a Custom Union shall be the first stage in the process of economic integration.
Therefore, real economic integration in the region commenced with the coming into force of the Customs Union. The Custom Union allows East Africa to operate as a free trade area where Partner States have reduced or eliminated taxes on goods originating from within the community and have the common tariff on goods imported from other countries. It has resulted into the increase volumes of intra EAC trade and the sustained GDP growth rate in all the Partner States averaging 6% annually for the last 10 years.
