Trade Flow Creation And Diversion Effects Of Comesa

In this paper, we take in hand two main issues: what determines trade flow amongrnCOMESA members and what effect COMESA has on its member countries, traderncreation or diversion?rnAnnual data for 20 African countries, 12 COMESA members and 8 non-members, andrnthat of EU for the period 1999-2007 are used to estimate the gravity model employ"'d inrnthe study.rnAccording to the findings from the study, the GDPs, population and language amongrnother factors can explain export flows in our observation. We find that export flowsrnamong countries increase more than proportionately with GDPs.rnWe also found that the geographic distance might impede trade rather more strongly inrnthe context of COMESA. The other crucial finding is that COMESA has not produced therntrade creation expected among its members. The major challenges faced by COMESArnsuch as: overlapping membership and under developed infrastructures may explain thisrnresult.rnThese results suggest the importance of improvement of trade facilities andrninfrastructures, which could strengthen the targets of regional agreements.rnKey words: COMESA, gravity model, trade flow, creation and diversion

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