| African Regional Trade Agreements and Intra-African Trade |
Nicholas Ngepah, Maxwell C. Udeagha, |
| University of Johannesburg, Johannesburg, South Africa |
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Corresponding Author:
Nicholas Ngepah ,Tel: +27733789075, Email: nngepah@uj.ac.za |
| Copyright ©2018 The Journal of Economic Integration |
| ABSTRACT |
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This paper investigates regional trade agreements in Africa by using panel data spanning 1995~2014. Trade creation and diversion effects are assessed through a gravity model estimated using the Eicker–White robust covariance Poisson pseudo-maximum likelihood method. This method proves superior to the usual nonlinear least square estimators, especially against heteroscedasticity and data with zero value. The findings suggest that regional trade agreements may enhance trade. The differences in effects can be matched with the effectiveness in implementation by respective member countries. The trade gains of regional trade agreements do not come at the expense of trade with non-members. By controlling for the duration within a regional trade agreement, we also show that a very small but significant share of the benefits occurs over time in the Economic and Monetary Community of Central Africa, Southern African Development Community, Southern African Customs Union, and West African Economic and Monetary Union. Trade benefits seem to decline over time in the East African Community.
JEL Classification
F13: Trade Policy; International Trade Organizations
F15: Economic Integration
C33: Models with Panel Data; Longitudinal Data; Spatial Time Series
C30: General |
| Keywords:
Regional Trade Agreements | Gravity Model | Trade Creation | Trade Diversion | African RTAs | Panel Data
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