This research seeks to examine the effects of the establishment of regional trade agreements (RTAs) among developing nations on trade, welfare and production activities. The focus here is on the new East African Community (EAC) formed between Kenya, Uganda and Tanzania and established in 1999. The formation of the new EAC raises the important question of whether this regionally based trading agreement is of economic merit to its members. This study begins by reviewing trends in regional trade flows and the extent to which regional integration has affected trade patterns and productive activities. Using a gravity model augmented with several sets of dummy variables, I estimate the effect of the EAC-RTA on trade and welfare on members and non-members. The results show that intra-bloc trade is on average 18 times
higher than what would be expected in the absence of the agreement. However, this trend does not seem to be influenced by the official lowering of trade barriers with the formation of the EAC. Model results also show a decline in bloc exports to the rest of the world suggesting that the bloc has trade diverting tendencies. Since static gains from the EAC-RTA are quite low, possibly dynamic gains from regional integration lend more support to the economic merit of the EAC.
| Identifer | oai:union.ndltd.org:USASK/oai:usask.ca:etd-12212006-133331 |
| Date | 02 January 2007 |
| Creators | Ng'ang'a, Wanjiru |
| Contributors | Echevarria, Cristina, Dyaglo, Natalya, Bruneau, Joel F., Kerr, William A. |
| Publisher | University of Saskatchewan |
| Source Sets | University of Saskatchewan Library |
| Language | English |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://library.usask.ca/theses/available/etd-12212006-133331/ |
| Rights | unrestricted, I hereby certify that, if appropriate, I have obtained and attached hereto a written permission statement from the owner(s) of each third party copyrighted matter to be included in my thesis, dissertation, or project report, allowing distribution as specified below. I certify that the version I submitted is the same as that approved by my advisory committee. I hereby grant to University of Saskatchewan or its agents the non-exclusive license to archive and make accessible, under the conditions specified below, my thesis, dissertation, or project report in whole or in part in all forms of media, now or hereafter known. I retain all other ownership rights to the copyright of the thesis, dissertation or project report. I also retain the right to use in future works (such as articles or books) all or part of this thesis, dissertation, or project report. |
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