Does Brexit Have an Impact on EAC-EU Commodity Trade?

Abstract

The East African Community (EAC) and European Union (EU), have an Economic Partnership Agreement (EPA) initiated in October 2014. The EAC agreed to negotiate on the EPA in order to participate beneficially in the global economy, decrease poverty and support their economic development. By fast-tracking the already existing economic integration, the EAC wanted to eliminate barriers to trade, form bigger markets and stimulate productivity and investment expansions. This paper predicts the trade in commodities between the EAC and EU for 10 years using import and export data from 2009-2016. Regression analysis is used to forecast the level of imports and exports. The study uses a linear model Ft=a+bt+ e to forecast the level of imports and exports. Two linear models one for imports (Ft=2,791,351.50+28,196t) and another for exports (Ft=4,177,572.071 +62,500.3t) were formulated. The study concludes that there is no significant difference caused by BREXIT on EAC-EU commodity trade in 10 years.