Impact of Overlapping Preferential Trade Agreements on Regional Trade in Sub-Saharan Africa PDF Download

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Category :
Languages : en
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Book Description
Intraregional trade in sub-Saharan Africa is low. A popular policy tool to promote economic integration and intraregional trade are preferential trade agreements (PTAs). The African continent has seen an exceptional proliferation of PTAs. The benefits of PTAs have not been undisputed, as their level of implementation has been found shallow and their success frequently lacking. The lack of success is sometimes attributed to the many overlapping regional trading blocs in sub-Saharan Africa. Multiple memberships in various PTAs may have detrimental effects to intraregional trade. However, there is no convincing evidence to support this claim. This paper seeks to empirically assess the impact of overlapping membership in PTAs in sub-Saharan Africa. The paper estimates a gravity model of trade with data covering bilateral trade flows for 47 countries situated south of the Sahara, with mixed results. The research has provided evidence for both, detrimental and beneficial effects, which can be attributed to the overlapping of PTAs.

Author: Yongzheng Yang
Publisher: International Monetary Fund
ISBN: 9781589064393
Category : Business & Economics
Languages : en
Pages : 62

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In recent years, African policymakers have increasingly resorted to regional trade arrangements (RTAs) as a substitute for broad-based trade liberalization. This trend has long-term implications for the effectiveness of trade policy as a tool for poverty reduction and growth. This paper examines the record of RTAs in promoting trade and investment. It also explores policy measures that may help improve RTAs' performance.

Author: Souleymane Coulibaly
Publisher:
ISBN:
Category : Commercial treaties
Languages : en
Pages : 28

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Many recent papers have pointed to ambiguous trade effects of developing regional trade agreements (RTAs), calling for a reassessment of their economic merits. The author focuses on seven such agreements currently in force in Sub-Saharan Africa (ECOWAS and SADC), Asia (AFTA and SAPTA) and Latin America (CACM, CAN, and MERCOSUR), estimating their impacts on their members' trade flows. Instead of the usual dummy variables for RTAs, he proposes a variable taking into account the number of years of membership. He then combines a gravity model with kernel estimation techniques to capture the non-monotonic trade effects while imposing minimal structure on the model. The results indicate that except for SAPTA, these RTAs have had a positive impact on their members' intra-trade over the estimation period (1960-99). AFTA seems to be the most successful among them, with an estimated positive impact on its members' imports from the rest of the world (hence no trade diversion), but its impact on their exports to the rest of the world is rather limited. During its first 10 years of existence, ECOWAS appears to have had a positive impact on its members' imports from the rest of the world (hence no trade diversion), but this positive impact vanished over time. SAPTA's negative impact on its members' intra-trade is probably an implicit effect of the India-Pakistan tensions over the estimation period.

Author: Gbadebo Odularu
Publisher: Springer
ISBN: 3319455699
Category : Business & Economics
Languages : en
Pages : 166

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Book Description
This book provides a comprehensive analysis of South-South regional trade issues, with a particular focus on sustainably fostering Africa’s regional trade agenda. It examines the extent to which South-South regional trade agreements (RTAs) have contributed toward enhancing regional integration and economic expansion in Africa in particular, and in the South in general. The authors recommend new conceptual frameworks, appropriate initiatives, and workable policy recipes to help South-South RTAs enhance Africa’s economic transformation trajectory. The book underscores the geo-politics, as well as the opportunities and challenges that emerging economies now represent for Africa in the context of South-South regional trade policy. Readers will learn how Africa can strengthen its regional trade game by securing and building on the positive outcomes of South-South RTAs.

Author: Céline Carrère
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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The aim of this paper is (i) to assess the impact of regional agreements on members' trade in Sub-Saharan Africa (intra-regional trade as well as trade with the rest of the world), controlling for the other traditional determinants, including geography and transport costs and (ii) to compare the respective effect of the preferential trade agreements and the currency unions. Considering the period 1962-1996, we first assess the average impact of each regional agreement on their implementation period and second we show how these impacts have evolved. An "augmented" gravity model is designed, relying on a transport cost function, in which specific dummies allow trade creation and trade diversion effects to be separated. The model is estimated in panel with bilateral specific effects, to isolate the non-observable characteristics of each pair of countries, and according to the Hausman-Taylor (1981) method, which takes into account a possible endogeneity of some explanatory variables. During their implementation, the African regional trade agreements have generated a significant increase in trade between members, although initially often through trade diversion. In the two agreements of the CFA franc zone, the currency unions have largely reinforced the positive effect of the corresponding preferential trade agreements on intra-regional trade, while dampening their trade diversion effect. Actually, currency unions rather had a trade creation effect (all the more important as the international monetary environment has been more unstable), whereas preferential trade agreements resulted in important trade diversion.

Author: Olivier Cadot
Publisher: OUP Oxford
ISBN: 0191537373
Category : Business & Economics
Languages : en
Pages : 348

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The dark side of preferential trade agreements, Rules of Origin (RoO) are used to determine the eligibility of goods to preferential treatment. Ostensibly meant to prevent the trans-shipment of imported products across Free Trade Agreement borders after superficial screwdriver assembly, they act in reality as complex and opaque trade barriers. This book provides evidence strongly suggesting that they do so by intent rather than accidentally—-in other words, that RoOs are policy. Part one draws insights about the effects of RoOs on cross-border trade and outsourcing from recent economic theory. Part two reviews the evidence on RoOs in preferential agreements around the world, putting together the most comprehensive dataset on RoOs to date. Part three explores their "political economy"—-how special interests have shaped them and continue to do so. Part four provides econometric evidence on their costs for exporters and consequent effects on trade flows. Finally, part five explores how they affect trade in the developing world where they spread rapidly and have the potential to do most harm. Beyond the collection of new evidence and its interpretation in light of recent theory, the book's overall message for the policy community is that RoOs are a potentially powerful and new barrier to trade. Rather than being relegated to closed-door technical meetings, their design should hold center-stage in trade negotiations.

Author: Jean-Pierre Chauffour
Publisher: World Bank Publications
ISBN: 0821386433
Category : Business & Economics
Languages : en
Pages : 537

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Book Description
The Handbook offers an introduction to the key elements of Preferential Trade Agreements (PTAs), addressing the practical economic and legal aspects of the regulatory policies in PTAs.

Author: Céline Carrère
Publisher:
ISBN:
Category :
Languages : en
Pages : 324

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Book Description
Beyond an introductory chapter, three essays are proposed in this thesis to study the effects of regional integration agreements on trade orientation and welfare of developing countries. Chapter 2, "Revisiting the Effects of Regional Trading Agreements on Trade Flows with Proper Specification of the Gravity Model" attempts to shed further light, with panel data econometrics, on the long-standing controversial Vinerian concern about the possibility that a preferential trade agreement may be leading to "trade deversion" rather than to "trade creation". Chapter 3, "African Regional Agreements : Impact on Trade with or without Currency Unions", moves beyond to disentangle the effects of currency unions from those of preferential tariff agreements on members trade, in the context of Sub-Saharan Africa. Finally, Chapter 4, "Regional Trading Agreements and Welfare in the South : When Scale Economies in Transport Matter", turns to a simulation model to investigate the welfare effect, for a developing country, of regional preferential trade agreement once taken into account their impact on transport costs...

Author: Richard E. Mshomba
Publisher: Stanford University Press
ISBN: 1503640426
Category : Business & Economics
Languages : en
Pages : 313

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Book Description
Nonreciprocal preferential trade arrangements are a defining feature of the relationship between developed and developing countries dating back to the colonial era. In the late 1950s, these arrangements started to take a multilateral form when members of the European Economic Community established special trade arrangements with their colonies. Since then, several trade arrangements have featured African countries among the preference-receiving countries. Yet it is not always clear how preferential these arrangements are and whether they in fact help African countries or instead lead them to perpetual dependence on specific markets and products. Richard E. Mshomba carefully examines the history of these programs and their salient features. He analyzes negotiations between the EU and African countries to form Economic Partnership Agreements. Nonreciprocal preferential trade arrangements are often unpredictable, since the duration and magnitude of preferences are at the discretion of the preference-giving countries. However, when used in conjunction with other development programs and with laws and regulations that encourage long-term investment and protect employees, they can increase economic opportunities and foster human development. This book recognizes the potential impact of nonreciprocal preferential trade arrangements and provides recommendations to increase their viability.

Author: Denis Medvedev
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 90

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Book Description
The author investigates the effects of preferential trade agreements (PTAs) on bilateral trade flows using a comprehensive database of PTAs in force and a detailed matrix of world trade. He shows that total trade between PTA partners is a poor proxy for preferential trade (trade in tariff lines where preferences are likely to matter): while the former amounted to one-third of global trade in 2000-02, the latter was between one-sixth and one-tenth of world trade. His gravity model estimates indicate that using total rather than preferential trade to assess the impact of PTAs leads to a significant downward bias in the PTA coefficient. The author finds that product exclusions and long phase-in periods significantly limit preferential trade, and their removal could more than double trade in tariff lines above 3 percent of most-favored-nation (MFN) duties. He also shows that the effects of PTAs on trade vary by type of agreement and are increasing in the incomes of PTA partners.