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Do South-South trade agreements increase trade? Commodity-level evidence from COMESA

  • Anna Maria Mayda
  • Chad Steinberg

South-South trade agreements are proliferating. Yet the impact of these agreements is largely unknown, as existing North-North and North-South micro-level studies are likely to yield misleading predictions for South-South trade agreements. This paper estimates the impact of 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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Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 42 (2009)
Issue (Month): 4 (November)
Pages: 1361-1389

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Handle: RePEc:cje:issued:v:42:y:2009:i:4:p:1361-1389
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