Front Matter

Front Matter

Author(s):
Sanjeev Gupta, and Yongzheng Yang
Published Date:
September 2005
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    © 2005 International Monetary Fund

    Production: IMF Multimedia Services Division

    Typesetting: Alicia Etchebarne-Bourdin

    Cover Design: Martine Rossignol-Winner

    Photo Credit: Andrew Burke/Lonely Planet Images

    Cataloging-in-Publication Data

    Yang, Yongzheng.

    Regional trade arrangements in Africa / Yongzheng Yang and Sanjeev Gupta—[Washington, D.C.]:

    International Monetary Fund, 2005.

    • p. cm.

    Includes bibliographical references.

    ISBN 1-58906-439-9

    1. International trade—Africa. 2. International Monetary Fund. I. Gupta, Sanjeev. HF3874.Y35 2005

    Disclaimer: The views expressed in this work are those of the authors and do not necessarily represent those of the IMF or IMF policy. The IMF has not edited this publication. Some documents cited in this work may not be available publicly.

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    Abbreviations

    ACP

    Africa, Caribbean, and Pacific

    AEC

    African Economic Community

    AfDB

    African Development Bank

    AGOA

    African Growth and Opportunity Act

    ASEAN

    Association of Southeast Asian Nations

    ATC

    Agreement on Textiles and Clothing

    CEAO

    West Africa Economic Community

    CEMAC

    Central African Economic and Monetary Community (formerly UDEAC)

    CET

    Common external tariff

    CMS

    Constant market share

    COMESA

    Common Market for Eastern and Southern Africa

    CU

    Customs Union

    EAC

    East African Community/Cooperation

    EBA

    Everything but Arms (EU)

    ECA

    Economic Commission for Africa (UN)

    ECCAS

    Economic Community for Central African States

    ECOWAS

    Economic Community of Western African States

    EEC

    European Economic Community

    EFTA

    European Free Trade Association

    EPA

    Economic Partnership Agreement (EU)

    EU

    European Union

    FDI

    Foreign direct investment

    FTA

    Free trade agreement/area

    GATT

    General Agreement on Tariffs and Trade

    GSP

    Generalized system of preferences

    Mercosur

    Common Market of the South

    MFN

    Most favored nation

    NAFTA

    North American Free Trade Agreement

    NEPAD

    New Partnership for Africa’s Development

    NTBs

    Nontariff barriers

    OAU

    Organization of African Unity

    PRGF

    Poverty Reduction and Growth Facility

    Quad

    Canada, the EU, Japan, and the United States

    ROO

    Rule of origin

    RTA

    Regional trade arrangement

    SACU

    Southern African Customs Union

    SADC

    Southern African Development Community

    TIM

    Trade Integration Mechanism

    UDEAC

    Central African Customs and Economic Union

    VAT

    Value-added tax

    WAEMU

    West African Economic and Monetary Union

    WTO

    World Trade Organization

    Preface

    Trade policy is a critical component of an effective strategy for reducing poverty and boosting growth in Africa. In recent years, however, African policymakers have increasingly resorted to regional trade arrangements (RTAs) as a substitute for broad-based trade liberalization. This trend has long-term implications for the effectiveness of trade policy as a tool for poverty reduction and growth.

    This Special Issues paper examines the record of African RTAs in promoting trade and investment and explores policy measures that may help improve the RTAs’ performance. The paper concludes that African RTAs have been generally ineffective in promoting trade and foreign direct investment. Relatively high external trade barriers and low resource complementarity between member countries limit both intra- and extraregional trade. Small market size, poor transport facilities, and high trading costs make it difficult for African countries to reap the potential benefits of RTAs. To increase regional trade and investment, African countries need to undertake more broad-based liberalization and streamline existing RTAs, supported by improvements in infrastructure and trade facilitation. Early action to strengthen the domestic revenue base would help address concerns over revenue losses from trade liberalization.

    This paper was originally prepared, with input from Alexei Kireyev and Paolo Dudine, for an IMF Seminar on Trade and Regional Integration in Africa, held in Dakar, Senegal, December 6, 2004. The authors wish to thank the following for their helpful comments: Luis de Azcarate, Bergljot Barkbu, Anupam Basu, Ndiame Diop, Anne-Marie Gulde, Paul Heytens, Lawrence Hinkle, Chris Hoveka, Michael Keen, Padamja Khandelwal, Hans Peter Lankes, Arnold McIntyre, Jan Mikkelsen, Koffie Nassar, Michael Nowak, Arvind Panagariya, Gonzalo Pastor, Catherine Pattillo, Delpin Rwegasira, Liliana Schumacher, Arnim Schwidrowski, Chad Steinberg, and Stephen Tokarick. Vera Da Luz, Elisa Diehl, and Suresh Gulati provided excellent research and editorial assistance. Archana Kumar of the External Relations Department coordinated the production of this publication.

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