Regional Integration and Trade in Agrifood Products: Evidence from the East African Community
DOI:
https://doi.org/10.1956/jge.v11i3.400Keywords:
Regional Integration, Trade in Agrifood or Food Items or Products, EAC, Gravity Model and Poisson, Panel Data Analysis.Abstract
This study examines the postulation that trade liberalization (regional integration) policies of LDCs normally undermine their presumed impact. The study is based on the experience of EAC trade agreement. It adopts the extended gravity model, to analyze the impact of this regional integration on food item. The model includes 168 countries and is estimated with panel data over the period 1988 – 2009. The Poisson estimation method took into account unobserved trade data characteristics of the bilateral trade relations. The results show that regional trade integration increased exports, normally at the expense of exports and welfare of non-members, and these exports were more reflective of food exports growth. The same has not been true for intra-bloc exports of food although the sector experienced an increase in exports resulting from the implementation of a trade agreement. The intra-bloc results are consistent with the structural rigidities of the exporting EAC Countries.
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Wanjiru, Ng’ ang’a. 2006. The “New†East African Community: Effects on Trade, Welfare, and Productive Activities in East Africa. Unpublished M.A. Dissertation Submitted to the University of Sasktchewan, Saskotoon, SK.
World Bank. 2000. Trade Blocks, Oxford University Press, New York
Wooldgridge, J. M. 2004. Introductory Econometrics: A Modern Approach. South-Western College Pub; 2 Edition.
Anderson J. and E. Van Wincoop. 2003. “Gravity with Gravitas: A solution to the Border Puzzle†AER, 93:170-192.
Appleyard, D and Field, A. J. 2001. “International Economics – Trade Theory and Policyâ€, 4th edition, Irwin –Chicago.
Benjamin, R. 2004. A gravity Study of the Proposed China-ASEAN Free Trade Area. The International Trade Journal, 18(2), 335 – 353.
Bergstarnd J.H. 1990. “The Heckscher-Ohlin-Samuelson model, the Linder Hypothesis, and the Determinants of Bilateral Intra-industry Trade†Economic Journal, 100(4):1216-1229
Bhagwati, J. 1991. The World trading System and Risk. Princeton University Press.
Carrere, C. 2004. Revisiting the effects of Regional Trade Agreements on Trade Flows with Proper Specification of the Gravity Model. European Economic Review 50(2006) 223-247.
Cernat, L. 2001. Assessing Regional Trade Arrangements: Are South-South RTAs More Trade Diverting? Policy Issues in International Trade and Commodities. Study Series No. 6. United Nations Conference on Trade and Development. New York and Geneva.
Deardoff, V. A. 1998.â€Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical Framework?†in J.A. Frankel (ed.). The Regionalization of the World Economy, Chicago: University of Chicago Press
Dell’Aquila, C. Sarker, R. and Meike, K. D. 1999. Regionalism and Trade in Agrifood Products. Working Paper 99-5, International Agriculture trade Research Consortium, St. Paul, MN.
Diao, X. Rose, T. and Somwaru. 1999. What is the Cause of Growth in Regional Trade: Trade Liberalization or RTA? The Case of Agriculture. Working Paper 56, International Agriculture Trade Research Consortium, St Paul, MN.
Dissanayake, S. and Weerahawa, J. 2009. Trade Creation and Trade Diversion Effects of Agricultural Trade. Proceedings from the Asia-Pacific Trade Economists’ Conference on Trade-Led Growth in Times of Crisis. Organized by the United Nations ESCAP and ATNeT.
Egger, P. 2002. Estimating regional trading bloc effects with panel data. Review of World Economics, Vol. 140, No 1, pp 151-166
Either, Wilfred. 1983). Modern International Economics. W. W. Norton Company, Inc.
Frankel, A. J. 1997. Regional Trading Blocs in World Economic Systems. Peterson Institute for International Economics, number 72
Grant, J. and Lamber, D. M. 2005. Regionalism in World Agriculture Trade. Lessons from Gravity Model estimate. A Paper Selected for Presentation at the American Agricultural Economics Association’s Annual Meeting, Providence. Rhode island. July 24 -27, 2005.
Gregory, R. G. 1981. Co-operation and Collaboration in Colonial East Africa: The Asians’ Political Role. African Affairs, 80, 259-273.
Gujarati, N. D. 2004. Basic Econometrics. 4th Edition. West Point Military Academy.
Head, Keith. 2003) Gravity for Beginners. Mimeo, University British Columbia. Cited from www.economics.ca/Keith/gravity.pdf.
Head, K. and Ries, J. 2004. Regionalism with multilateralism: The WTO Trade Policy review of Canada. The World Economy.
Helpman, E. Melitz, M. and Rubinstain, Y. 2008. Trading Partners and Trading Volumes. Working Paper 12927. National Bureau of Economics Research. http://www.nber.org/papers/w12927.
Heston, A., Summers, R. and Aten, B. 2009. Penn World Table Version 6.3, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania.
Holden, M. 2003. Stages of Economic Integration: From Autarky to Economic Union. Cited from Publication.gc.ca.
Jayasinghe, S. and Sarker, Rakhal, R. 2004. Effects of regional Trade Agreements on trade in Agrifood Products: Evidence from Gravity modeling Using Disaggregated Data. Center for Agriculture and Rural Development, Lowa State University.
Kessie, E. 2004. The Doha Development Agenda after the Hong Kong Ministerial Conference: Narrowing the Gaps in Members' Negotiating Positions.
Kirkpatrick, C. and Watanabe, M. 2005. Regional Trade in Sub-Saharan Africa: An Analysis of East African Trade Cooperation, 1970-2001. Manchester School, Vol 73 No. 3 pp 141-164.
Krugman, P. and Obstfeld, M. 2009. International Economics: Theory and Policy, 8th ed. Boston, MA: Addison Wesley. ISBN: 0321278844.
Mayers, T. and Zignago, S. 2006. Notes on CEPII’s Distances Measures. Accessed from www.cepii.fr/anglaisgraph/bdd/distances.htm
Mahoney, M., Trigg, R., Griffin, M., and Pustay, M. 1998. Techniques for Analyzing Industries and Competitors: New York: Free Press.
Obsfeld, M. and Rogoff, M. 2001. The Six major puzzles in international macroeconomics. Is there a common cause? NBER Working Paper 7777.
Ochwada, H. 2004. Rethinking East African Integration: From Economic to Political and From State to Civil society. Council for the Development of Social Science Research in Africa (CODESERIA). Vol. XXIX, No. 2.
OECD (Organization for Economic Cooperation and development). 1997. The Uruguay Round Agreement on Agriculture. OECD, Paris.
Polak, J. 2007. Is APEC a Natural Regional Trading bloc? A critique of the Gravity Model of International Trade. The World Economy, 19(5), 533-543.
Rojid, S. 2006. COMESA Trade Potential: A gravity Approach. Applied Economic Letters, 13(14), 947 – 951.
Salvatore, D. 2004. International Economics. 8th Edition. John Wiley & sons, Inc.
Sarker, R. and Jayasinghe, S. 2007. Regional Trade Agreements and Trade in Agrifood Products: Evidence for the European Union from Gravity Modeling Using Disaggregated Data. Agricultural Economics. Vol. 34(1): 93 – 104.
Schiff, M., and Winters A. L. (1998). Dynamics and Politics in Regional Integration Arrangements: An Introduction, in: The World Bank Economic Review, Vol. 12, No. 2.
Serrano, R. and Pinilla, V. 2010. Agriculture and Food Trade in European Union Countries (1963 – 2000). A Gravity Equation Approach. DT-AEHE No. 1007. Cited from www.aehe.net.
Shams, R. 2003. Regional Integration in Developing Countries: Some Lessons Based on Case Studies. HWWA Discussion Paper 251.Hamburgisches Welt-Wirtschafts-Archiv (HWWA) Hamburg Institute of International Economics.
Silva, J. S. and Tenreyro, S. 2006. The Log of Gravity. Discussion Paper Series No. 5311. International Macroeconomics and International trade. Center for Economics Policy Research. www.cepr/pubs/dps/DP5311.asp
Soloaga, I. and Winters, L. A. 2001. “Regionalism in the Nineties: What Effect on Trade?†North American Journal of Finance and Economics 12(1):1-29.
Stock, H. J and Watson, W. M. 2003. Introduction to Econometrics. Addision-Wesley Higher Education Group.
Subramanian, A. and Wei, S, J. 2003. The WTO Promotes Trade, Strongly But Unevenly. National Bureau of Economics Research (NBER). Working Paper 10024.
Suranovic, S.M., International Trade Theory and Policy (online at http://internationalecon.com/Trade/T-toc.php).
Tinbergen, J. 1962. Shaping the World Economy: Suggestions for an International Economic Policy. New York: The Twentieth Century Fund.
Trivedi, P. K. 2009. Microeconomics Using Stata. A Stata Press Publication. Stata Press, 4905 Lakeway Drive, College Station, Texas.
Virtual Institute – United Nations Conference on Trade and Development. 2007. Teaching Material on Regional Trade Agreements. Access from http://vi.unctad.org/resources-mainmenu-64/teaching-materials-mainmenu-65/33-vi-teaching-material-on-regional-trade-agreements.
Vylder, S. D. 2007. The Least Countries and World Trade – Second Edition. Sida Studies No. 19.
Westerlund, J. and Wilhelmsson, F. 2006. Estimating the gravity Model without Gravity Using Panel Data. Accessed from at www.nek.lu.se.
Wanjiru, Ng’ ang’a. 2006. The “New†East African Community: Effects on Trade, Welfare, and Productive Activities in East Africa. Unpublished M.A. Dissertation Submitted to the University of Sasktchewan, Saskotoon, SK.
World Bank. 2000. Trade Blocks, Oxford University Press, New York
Wooldgridge, J. M. 2004. Introductory Econometrics: A Modern Approach. South-Western College Pub; 2 Edition.
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Published
27.09.2015
How to Cite
Ejones, F. (2015) “Regional Integration and Trade in Agrifood Products: Evidence from the East African Community”, Journal of Global Economy, 11(3), pp. 212–246. doi: 10.1956/jge.v11i3.400.
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