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The Determinants of Trade Costs in the East African Community
Sheila Mwendwa Kaminchia 세종대학교 경제통합연구소 2019 Journal of Economic Integration Vol.34 No.1
This paper assesses the effectiveness of the East African Community (EAC) in integrating member countries by way of lowering total bilateral trade costs. This paper first provides information about the size and distribution of bilateral trade costs among 16 manufacturing industries over the period 1990-2012 for a sample comprising 5 EAC countries and 87 of their trade partners. The estimates indicate that it costs on average 3 times more for an EAC country to trade manufactured goods with another EAC country than to trade the goods domestically within itself. The estimates also indicate that it costs on average 8 times more for an EAC country to trade manufactured goods with a non-EAC country than to trade the goods domestically within itself. The paper then shows the importance of natural and policy-related factors in determining the trade costs.