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GTAP Resource #3900

"Deepening Regional Integration in Africa: A Computable General Equilibrium Assessment of the Establishment of a Continental Free Trade Area followed by a Continental Customs Union"
by Karingi, Stephen and Simon Mevel

In January 2012, the 18th African Union (AU) Summit of African Heads of States and Governments was held in Addis Ababa. At this occasion, a major decision was taken with the adoption of the AU Action Plan for "Boosting Intra-African Trade and the Establishment of a Continental Free Trade Area (CFTA)". This attests of a strong desire to deepen regional integration in Africa. Moreover, the AU Member States expressed the wish to see the share of intra-African trade doubling within the next 10 years.

While a tentative date of 2017 has been agreed for the formation of a CFTA, the Abuja Treaty, signed in 1993, specifically states the requirement for establishing a continent-wide Customs Union by 2019.

This paper first reviews the main trade-related constraints faced by Africa today. Then, it explores in what extent the formation of a CFTA followed by a Continental Customs Union (CCU) would help Africa to overcome these limitations and to fulfill AU Member States’ objective in terms of intra-African trade stimulation.

The analysis is conducted using the MIRAGE Computable General Equilibrium model. Our findings show that, although a CFTA would significantly contribute to increasing trade and its sophistication within the African continent, the removal of strictly tariff barriers would not be sufficient to double the share of intra-African trade at the horizon 2022. This goal could only be achieved if complementary non-tariff measures aiming at easing trade, such as, decreasing the length of customs procedures and port handling, are adopted. While the formation of a CCU would not result in any additional increase of the share of intra-African trade, as compared to a CFTA, it would, however, significantly promote African exports to third countries.

Keywords: Regional integration, Free Trade Areas, Customs Union, Trade facilitation, Computable General Equilibrium model, GTAP database, African trade policies

Resource Details (Export Citation) GTAP Keywords
Category: 2012 Conference Paper
Status: Published
By/In: Presented at the 15th Annual Conference on Global Economic Analysis, Geneva, Switzerland
Date: 2012
Created: Karingi, S. (4/30/2012)
Updated: Batta, G. (6/6/2012)
Visits: 2,891
- Preferential trading arrangements
- Africa (North)
- Africa (Central)
- Africa (East)
- Africa (West)
- Africa (Southern)

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