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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

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

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Length: 35 pages
Date of creation: 26 Feb 2007
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Handle: RePEc:imf:imfwpa:07/40

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Keywords: South-South trade agreements ; trade creation ; trade diversion ; International trade agreements ; Uganda ; Imports ; Commodities ; Developing countries ; Common Market for Eastern and Southern Africa ; Trade models ;

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Mikic, Mia, 2007. "Preferential trade agreements and agricultural trade liberalization in Asia and the Pacific," MPRA Paper 2947, University Library of Munich, Germany. [Downloadable!]
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