Trade Facilitation and Trade Flows in the Comesa: Case Study of Ethiopia and Kenya
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Date
2012-06
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A.A.U
Abstract
Trade facilitation is an important aspect and tool for economic development in the
co ntext of trade promotion and trade development. Based on this fact, the main objective
of this study was to analyze the impact of trade facilitation measures on exports and
imports among COMES A countries with special emphasis on trade flows between
Ethiopia and Kenya. To achieve this basic objective, an augmented gravity model was
analyzed using both descriptive and econometric methods of analysis by using data
covering the period of 2004 through 20 I O. The study constructed five indicators of trade
facilitation measures from a total of 13 indicators from the Global Competitiveness
Report. The basic findings are as follows: The number of trade documents was
significantly associated with imports and this clearly shows the barrier posed by the high
number of documents required to import. Although the cost of transport and time to
import had the expected signs, they were not significantly different from zero. Real GDP
and population were associated with the trade flows but the association was weak. Based
on these findin gs, there is need for trade and institutional reforms focusing on red ucing
the number of customs documents and eventual complete elimination of documents
required to import in the COMESA to boost trade flows. Efforts at addressing trade
facilitation should also encourage fast tracking of a monetary union so that exchange rate
variation effects on trade flows is completely eliminated.
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And Trade Flows In The Comesa: