Examining the Patterns and Dynamics of Intra-Regional Trade and Revealed Comparative Advantage in the East African Community

Abstract

This paper investigates intra-regional trade changes in the East African Community since its revival, as well as their revealed comparative advantage and evolution between 2001 and 2020. While most studies have examined the comparative advantage of individual EAC countries, they have not addressed how the revival of the Community impacted comparative advantage and intra-regional trade over time. As its analytical approach, the study calculates trade intensity indicators, revealed comparative advantage indices, and evaluates product categories that have lost, retained, or gained comparative advantage. The following conclusions are drawn from the study’s findings: first, the revival of the Community increased intra-regional trade at first, but it soon dwindled due to non-tariff barriers. Second, product groups exported in raw form retained their comparative advantage, with Uganda having the most such product groups. Third, comparative advantage evolved, with Kenya having the greatest number of product groups gaining comparative advantage. Three policy implications emerge: first, restoring intra-regional trade to immediate post-Community levels requires significant reductions in trade barriers. Second, increasing export revenues necessitates the addition of value to agricultural products. Third, due to the dynamic nature of comparative advantage, countries must tailor policy support to product groups that lose comparative advantage.