Regional Integration and Trade: The Case of the Common Market for Eastern and Southern Africa (COMESA) Free Trade Area

Abstract

Regional integration has been extensively debated in the literature and is forcefully advocated for, as its benefits cannot be underrated. These benefits range from unified forces in trade negotiations to increasing market access with the goal of enhancing the productivity and economic development of member countries. Before the founding of the Common Market for Eastern and Southern Africa (COMESA), the efforts of individual countries to influence trade were ineffective due to their limited individual production structures and markets, as well as their low bargaining power in international markets (COMESA Brief, 1994). Its establishment in 1994 was expected to address these challenges by providing an enlarged economic space and market, alongside increased collective bargaining power in international markets. Specifically, the bloc focused on strengthening the member states to achieve sustainable economic growth through a balanced development of its markets and production structures, as well as the promotion of regional cooperation in the areas of trade, investment, macroeconomic policies, and peace and security (COMESA Treaty, 1993). The establishment of a Free Trade Area (FTA) in 2000 and a Customs Union (CU) in 2009 further liberated the economic space for trade by harmonizing and removing tariffs and non-tariff barriers. It is against this background that this paper investigates whether COMESA countries have benefited from the deeper economic integration in terms of net trade volume, particularly after the establishment of the FTA.

How Can Tariff Elimination and Trade Facilitation Affect East African Economies?

“…For the specific case of the AfCFTA, there is empirical evidence that the agreement positively affects trade flows (Abrego et al, 2019; Bakouan et al, 2022; Ejones et al, 2021; Geda & Yimer, 2022; Gondwe, 2021; Oyelami, 2021; Riedel & Slany, 2019; Wonyra & Bayale, 2022) investment (Abrego et al, 2020; Mold & Mukwaya, 2016) consumer welfare (Fofack et al, 2021; Fouda Ekobena et al, 2021; Fusacchia et al, 2022). However, the literature on the COMESA free trade agreement, however, points to a welfare loss for Ethiopia as a result of the agreement (Amogne & Hagiwara, 2021).…”

COMESA Customs Union Commitments and the Impact on Kenya: Using the Wits-Smart Simulation Model

“…In the COMESA and East African regions, Kenya is widely recognised as a hub for trade and finance (Gondwe, 2021). It is also seen as a natural entry point because of its excellent market-based economy structure and liberalised international trade regulations (Were et al, 2013).…”

The Consequences of COVID-19 Disruption on Sustainable Economy in the Top 30 High-Tech Innovative Countries

“…Finally, the development of a free trade zone is necessary to shield the economy of the nations from the grab of global insecurity in the price of vital products. A variety of industries is critical and should be viewed as an industrial policy for governments (Gondwe, 2021 ).…”