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

February 1, 2007

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Anna Maria Mayda, and Chad Steinberg. Do South-South Trade Agreements Increase Trade? Commodity-Level Evidence from COMESA, (USA: International Monetary Fund, 2007) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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. This paper focuses on the static effects of South-South preferential trade agreements stemming from changes in trade patterns. Specifically, it estimates the impact of the Common Market for Eastern and Southern Africa (COMESA) on Uganda's imports between 1994 and 2003. Detailed import and tariff data at the 6-digit harmonized system level are used for more than 1,000 commodities. Based on a difference-in-difference estimation strategy, the paper finds that-in contrast to evidence from aggregate statistics-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, the paper finds no evidence of trade-diversion effects.

Subject: Commodities, Imports, Tariffs, Trade agreements, Trade liberalization

Keywords: COMESA country, Tariff rate, Trade creation, Trade diversion, WP

Publication Details

Pages:

35
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/040
Stock No:

WPIEA2007040
ISBN:

9781451866049
ISSN:

1018-5941

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