China is negotiating for the creation of a free trade agreement with the EAC.
The EAC has already signed co-operation agreements on trade with the US and the EU.
Recently, China wrote to the EAC Secretary-General proposing to negotiate with the EAC partner states a comprehensive free trade agreement (EAC-China FTA).
China also requested to undertake a joint feasibility study with the EAC on the proposed FTA, outgoing Secretary-General Richard Sezibera informed the Council of Ministers at a meeting in Arusha.
The Council directed the Secretariat to undertake a comprehensive cost-benefit analysis on the implications of negotiating FTAs with third parties.
"We are working on the directive of the Council," EAC spokesperson Richard Owora said.
He said they expect to conclude the work by June 30.
However, East African Business Council executive director Lillian Awinja cautioned that free trade with China would hinder EAC industrialisation.
"EAC shouldn't rush to negotiate an FTA with China. We need to study, consult a wide range of stakeholders, and establish the impact of such a deal on the EAC industrialisation blueprint," Ms Awinja told The EastAfrican.
She said the EAC needs to protect its investors in the manufacturing industry rather than expose them to unfair competition.
Ms Awinja said that already China floods the EAC market with its products.
"China has the capacity to flood the whole world with their products. If we are to protect our industries, let's choose only a few products from China," said Gasper M