Uganda’s Trade and Revenue Effects with the EAC Countries, DRC and Sudan

Gaalya Micah Samuel

doi:10.4236/me.2015.63031

Abstract

A WITS partial equilibrium model is used to perform simulations on Uganda’s trade and revenue effects with the EAC countries, DRC and Sudan using highly disaggregated HSC six-digit level trade data. At the zero percent tariff rate, tariff revenue effects in all country cases were small. At the 25 percent tariff rate, tariff revenue effects in all country cases simulated were large. This indicates that the revenue implications of changes of applied rates depend on the applied tariff rate on imports. High tariff rates show larger revenue effects, while low tariff rates show lower revenue effects. However higher tariff rates show lower trade volumes and lower tariff rates high trade volumes.

Highlights

Trade and tariff revenue effects are an important area of study for low incomes countries liberalizing their trade regimes
Overall the results indicate that the trade liberalization between Uganda and EAC partner states could lead to more trade for Uganda
In general on account of higher trade creation effects and higher total trade effects as a percentage of total imports, the results indicate that the trade liberalization between Uganda and DRC could lead to more trade

Summary

Introduction

Trade and tariff revenue effects are an important area of study for low incomes countries liberalizing their trade regimes. The EAC Customs Union eliminated intra-regional tariff and adopted a Common External Tariff (CET) for EAC member states. This raises a lot of questions given that the partner countries are at different levels of economic development and considerably rely on customs tariffs for trade and tax revenue. There are expressed fears about Uganda being at a disadvantage compared to its more industrialized neighbors, Kenya. Based on these concerns, previous studies by [3]-[6] have all investigated trade

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Discussion

Conclusion