The Effect of Framework Economic Partnership Agreement on East Africa Community Countries’ Trade with the European Union
Zawadi Ally (The Institute of Finance Management), Geoffrey Mwambe (National Parliament of Tanzania)
Download Article | Published On 21/08/2024

Abstract

Economic Partnership Agreements (EPAs) are trade and development agreements between the European Union (EU) and African, Caribbean and Pacific (ACP) countries. The main objective of EPAs is to promote trade and sustainable development among the regions. This paper gives early ex-post empirical evidence analysis on the impact of provisionally applied EPAs on two- way trade flows between the East African Countries and the EU. The study examines the effect of the Framework Economic Partnership Agreement on East African Community trade with the EU for the period of twenty-eight (28) years from 1990 to 2018. The analysis was carried out to estimate the effect of the interim EPA on EAC trade with the EU using the Gravity model approach. The estimation is conducted using the fixed effects model. The findings show that the Gross Domestic Product of East African countries has a positive and significant relationship with trade flows between East African and EU countries. Interim EPAs are found to be negative and insignificant on East African Countries - EU trade flows. The study concludes that when combined across all economic sectors, temporarily implemented EPAs have not, on average, affected East African Countries -EU trade flows.

Keywords

Gravity model approach, Economic Partnership Agreement, EAC, EU

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