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Title:Trade agreements and bilateral trade in sub-Saharan Africa: Estimating the trade effects of the EU-ACP PTA and RTAs PDF Logo
Authors:Turkson, Festus Ebo
Issue Date:2012
Series/Report no.:CREDIT Research Paper 12/07
Abstract:This paper on Trade Agreements within SSA, is an assessment of the ex post bilateral trade effect of the European Union-African Caribbean Pacific Preferential Trade Agreement (EU-ACP PTA) and sub-regional regional trade agreements (RTAs) on bilateral trade involving SSA countries. The main objective is to find out if EU trade preferences and regional trade agreements within SSA had increased trade flows. Estimating a gravity model augmented with measures of trade agreements, the paper made use of bilateral trade flows and key gravity covariates from CEPII database on 73 countries (48 SSA and 25 EU countries) over the period 1960-2006. After controlling for the endogeneity of the trade agreement dummy, accounting for multilateral price resistance and zero-valued trade flows, the findings indicate that the EU-ACP PTA and RTAs within ECOWAS and SADC have a positive and significant impact on bilateral trade involving SSA countries. In some cases the relative impact of the sub-regional RTAs was found to be stronger than the EU-ACP non-reciprocal PTA. The results therefore indicate the need for developing countries especially within SSA to focus on expanding and integrating regional markets in order to significantly improve trade performance.
Subjects:Trade Costs
Gravity Model
Bilateral Exports
International Trade
Domestic Trade
Developing Countries
Sub-Saharan Africa
JEL:F10
F13
F14
O55
O57
Document Type:Working Paper
Appears in Collections:CREDIT Research Papers, The University of Nottingham

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