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

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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. In this paper, we focus on the static effects of South-South preferential trade agreements that take place through changes in trade patterns. We estimate the impact of the Common Market for Eastern and Southern Africa (COMESA) on Uganda's imports between 1994 and 2003. We use detailed import and tariff data at the 6-digit Harmonized System level for over 1,000 commodities. Based on a difference-indifference estimation strategy, we find evidence--in contrast to aggregate statistics--that 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, we find no evidence of trade-diversion effects.

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  • Anna Maria Mayda & Chad Steinberg, 2006. "Do South-South Trade Agreements Increase Trade? Commodity-Level Evidence from COMESA," Working Papers gueconwpa~06-06-03, Georgetown University, Department of Economics.
    • Handle: RePEc:geo:guwopa:gueconwpa~06-06-03
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    2. Omar S. Dahi & Firat Demir, 2013. "Preferential trade agreements and manufactured goods exports: does it matter whom you PTA with?," Applied Economics, Taylor & Francis Journals, vol. 45(34), pages 4754-4772, December.
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    5. Bonga-Bonga, Lumengo & Mabe, Queen Magadi, 2020. "How financially integrated are trading blocs in Africa?," The Quarterly Review of Economics and Finance, Elsevier, vol. 75(C), pages 84-94.
    6. Samuel Admassu, 2019. "An empirical analysis of the trade-creation effect of African regional economic communities," Empirical Economics, Springer, vol. 56(3), pages 843-863, March.
    7. Athukorala, Prema-Chandra, 2011. "South-South Trade: An Asian Perspective," ADB Economics Working Paper Series 265, Asian Development Bank.
    8. Lisa Borgatti, 2011. "Economic Integration in Sub-Saharan Africa," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume I, chapter 20, Edward Elgar Publishing.
    9. Shadrack Muthami Mwatu & Charity Kageni Mbaka & John Gakuu Karanja & Grace Mukami Muriithi, 2024. "Trade Agreements, Technical Regulations, and Standards: Competitiveness Implications for Kenyan Exporters to European Union," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(2), pages 381-410, April.
    10. Diadié Diaw & Albert Lessoua, 2013. "Natural Resources Exports, Diversification and Economic Growth of CEMAC Countries: On the Impact of Trade with China," African Development Review, African Development Bank, vol. 25(2), pages 189-202, June.
    11. Kareem, Olayinka Idowu, 2011. "The Effects of the European Union.s and China.s Trade Agreements on Africa.s Exports," WIDER Working Paper Series 065, World Institute for Development Economic Research (UNU-WIDER).
    12. Stender, Frederik & Vogel, Tim, 2021. "Murky trade waters: Regional tariff commitments and non-tariff measures in Africa," IDOS Discussion Papers 13/2021, German Institute of Development and Sustainability (IDOS).
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    14. Strutt, Anna, 2008. "Dynamic Analysis of a BIMSTEC-Japan Free Trade Area," Conference papers 331715, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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    More about this item

    Keywords

    South-South Trade Agreements; Trade Creation; Trade Diversion;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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