The Benefits of Regional Trade Agreements in Africa

Despite the marginalization of Africa in the world trade system, this article shows that African Regional Trade Agreements (RTAs) ushered an era of economic integration with strong trade creation effects over the period 1965-2012. Some agreements failed to deliver the expected trade gains, but the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of West African States (ECOWAS), and the Southern African Development Community (SADC) have signicantly increased trade between members. Based on this analysis, a simple quantitative trade model is used (Arkolakis et al. 2012) to compare trade and welfare with and without these agreements. These counterfactual exercises show that RTAs have strongly affected trade costs, multilateral resistances and finally trade flows but with small effects on welfare.