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Do South-South Trade Agreements Increase Trade? Commodity-Level Evidence from COMESA

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  • Anna Maria Mayda
  • Chad Steinberg

Abstract

South-South trade agreements are proliferating: Developing countries signed 70 new agreements between 1990 and 2003. Yet the impact of these agreements is largely unknown. This paper focuses on the static effects of South-South preferential trade agreements stemming from changes in trade patterns. Specifically, it estimates the impact of the Common Market for Eastern and Southern Africa (COMESA) on Uganda''s imports between 1994 and 2003. Detailed import and tariff data at the 6-digit harmonized system level are used for more than 1,000 commodities. Based on a difference-in-difference estimation strategy, the paper finds that-in contrast to evidence from aggregate statistics-COMESA''s preferential tariff liberalization has not considerably increased Uganda''s trade with member countries, on average across sectors. The effect, however, is heterogeneous across sectors. Finally, the paper finds no evidence of trade-diversion effects.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/40.

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Length: 35
Date of creation: 01 Feb 2007
Date of revision:
Handle: RePEc:imf:imfwpa:07/40

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Keywords: Developing countries; Common Market for Eastern and Southern Africa; Trade models; tariff rates; tariff rate; preferential tariff; trade diversion; trade agreements; trade liberalization; preferential trade; elasticity of substitution; trade creation; preferential trade agreements; trade agreement; free trade; trade patterns; regional trade; import demand; tariff liberalization; trading partners; trade volumes; preferential trade liberalization; country of origin; international trade; changes in trade; nonmember countries; regional trade arrangements; tariff revenue; trade arrangements; regional trade agreements; export supply; common market; political economy; nontariff barriers; open economy; preferential trading; tariff data; economic integration; free trade agreement; trade reform; pro-competitive effects; regional integration; competitive effects; trade changes; open economies; food industry; trade effects; trading blocs; average tariff rate; evidence of trade diversion; trading arrangements; transport costs; trade unit; average tariff; world economy; world trade; aggregate consumption; multilateral trade; partner countries; trade taxes; preferential trade agreement; trade flows; tariff reductions; net welfare effect; multilateral trade negotiations; loss of tariff revenue; tariff lines; competitive pressure; tariff changes; multilateral free trade; trade performance; multilateral trade liberalization; domestic producers; trade barriers; idiosyncratic shocks; multilateral liberalization; world trade organization; trade reforms; international trade agreements; import value; trade negotiations; impact of trade; multilateralism; trade blocs; preferential trading arrangements; preferential concessions; impact of trade liberalization; import statistics; trade terms; high trade barriers; dynamic effects; preliminary assessment; preferential liberalization; nondiscriminatory trade liberalization; trade data; competitive markets; nondiscriminatory trade; global free trade; domestic production; trade effect; increased exports; trade volume; member country; value of imports; trade policies; importing country; total export; low trade; exporter; trade integration;

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Cited by:
  1. Demir, Firat & Dahi, Omar S., 2012. "Preferential Trade Agreements and Manufactured Goods Exports: Does It Matter Whom You PTA With?," MPRA Paper 37396, University Library of Munich, Germany.
  2. Jane Korinek & Mark Melatos, 2009. "Trade Impacts of Selected Regional Trade Agreements in Agriculture," OECD Trade Policy Papers 87, OECD Publishing.
  3. Mia Mikic, 2007. "Trends in preferential trade liberalization in Asia and the Pacific," STUDIES IN TRADE AND INVESTMENT, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), in: Studies in Trade and Investment - AGRICULTURAL TRADE - PLANTING THE SEEDS OF REGIONAL LIBERALIZATION IN ASIA, volume 60, pages 1-32 United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

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