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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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    Cited by:

    1. Mia Mikic, 2007. "Trends in preferential trade liberalization in Asia and the Pacific," STUDIES IN TRADE AND INVESTMENT,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).
    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.
    3. Jane Korinek & Mark Melatos, 2009. "Trade Impacts of Selected Regional Trade Agreements in Agriculture," OECD Trade Policy Papers 87, OECD Publishing.
    4. Khadan, Jeetendra & Hosein, Roger, 2014. "Trade, Economic and Welfare impacts of the CARICOM-Canada Free Trade Agreement," MPRA Paper 54836, University Library of Munich, Germany.
    5. 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.
    6. Khadan, Jeetendra & Hosein, Roger, 2014. "Trade, Economic and Welfare impacts of the CARICOM-Canada Free Trade Agreement," MPRA Paper 54836, University Library of Munich, Germany.
    7. Bonga-Bonga, Lumengo & Mabe, Queen Magadi, 2016. "How financially integrated are trading blocs in Africa?," MPRA Paper 75716, University Library of Munich, Germany.

    More about this item

    Keywords

    South-South Trade Agreements; Trade Creation; Trade Diversion;

    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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