Effects of East African Community Regional Trade Agreement on Member's Agricultural Exports
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Date
2014
Authors
Ouma, Duncan
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Abstract
Agricultural activities contribute to about 33% of the East African Comrnunitys Gross Domestic Product (World Bank, 2009),
83% of the populace live in rural areas and 80% of the populace depend on agriculture directly and indirectly for food,
employment and income, while about 40 million people in EAC suffer from hunger. Agriculture and agricultural trade is
therefore a tool that can be used to transform the rural areas and help reduce poverty levels in the region. EAC member stales has
formulated and implemented a number of initiatives to boost intra-regional trade. However. intra-EAC trade remains very low,
that is, at 9% of the total regional trad(: (compared to other RTA in Africa and beyond, for instance: EU-66%; East Asia-55%;
NAFT A-44%; ASEAN-27% and SADC-13%). Agricultural trade accounts to above 40 per cent of the intra-EAC trade. This
study investigated effect of EAC-RT A on the regions agricultural trade by analyzing the degree of trade creation and diversion
effects. Augmented gravity models were estimated under Random Effects using the Pseudo Poisson Maximum Likelihood
approach. The study used Panel data from UNCOMTRADE. International Financial Statistics and World Development
Indicators for the period 2000-2012 on the five EAC members and other 77 trade partners. The empirical findings showed
Kenya and Tanzania benefited more from the integration in terms of agricultural exports, while Uganda, Rwanda and Burundi
had no signif
Description
A paper presented at the International Conference on Dynamics of Rural Transformation in Emerging Economies
27-28 March, 2014