An empirical analysis of the trade-creation effect of African regional economic communities

Abstract

Currently, African countries are deepening and widening their regional trade agreements, aiming to establish a continent-wide free trade area by 2017. Using a comprehensive dataset of 148 countries for the period 1970–2010, I found robust evidence that African regional economic communities increase their members’ exports and imports, albeit with varying degrees. The results reveal that African trade blocs increase members’ exports by up to 175% and imports by as much as 200%. This paper documents a greater effect on exports and imports of those regional trade blocs with deeper integration.