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Trade Effects of the East African Community: Do We Need a Transitional Fund?

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  • Busse, Matthias
  • Shams, Rasul

Abstract

The paper evaluates the economic necessity and political incentives of a transitional fund for the East African Community (EAC). The fund has been proposed to encounter trade imbalances which may arise due to the intended customs union in East Africa. Using a disaggregated approach at the two-digit level of the Standard International Trade Classification, the paper assesses the overall impact of the EAC on trade flows. Moreover, the commodities that will be particularly affected by the customs union are identified. The results show that considerable trade effects cannot be expected, except for a very narrow range of products. The need for a transitional fund becomes less urgent from this perspective.

Suggested Citation

  • Busse, Matthias & Shams, Rasul, 2003. "Trade Effects of the East African Community: Do We Need a Transitional Fund?," HWWA Discussion Papers 240, Hamburg Institute of International Economics (HWWA).
    • Handle: RePEc:zbw:hwwadp:26290
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    1. P. J. Verdoorn, 1960. "The Intra-Bloc Trade of Benelux," International Economic Association Series, in: E. A. G. Robinson (ed.), Economic Consequences of the Size of Nations, chapter 0, pages 291-329, Palgrave Macmillan.
    2. World Bank, 2003. "World Development Indicators 2003," World Bank Publications - Books, The World Bank Group, number 13920, April.
    3. Clague, Christopher, 1971. "Tariff Preferences and Separable Utility," American Economic Review, American Economic Association, vol. 61(2), pages 188-194, May.
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    Cited by:

    1. Walkenhorst, Peter, 2005. "Trade Policy Developments in Tanzania: The Challenge of Global and Regional Integration," MPRA Paper 23399, University Library of Munich, Germany.
    2. Tobias Bünder, 2018. "How Common Is the East African Community’s Common External Tariff Really? The Influence of Interest Groups on the EAC’s Tariff Negotiations," SAGE Open, , vol. 8(1), pages 21582440177, January.
    3. Lucio Castro, 2005. "Regional Trade Integration in East Africa: Trade and Revenue Impacts of the Planned East African Community Customs Union," International Trade 0509005, University Library of Munich, Germany.
    4. Francis Onditi, 2021. "What does the Data Tell Us About Dominatarian Theory of Regional Integration?," Jadavpur Journal of International Relations, , vol. 25(1), pages 73-100, June.

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    Keywords

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    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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