Assessing the Impact of Non-Reciprocal Trade Preferences: the Case of African Growth and Opportunity Act (Agoa) and Subsaharan Africa's Agricultural Exports to the United States of America
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Date
2008-06
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A.A.U
Abstract
The purpose of the paper is to discuss and analyze the impact of Non Reciprocal
Trade Preferences the case of African Growth and Opportunity (AGOA) on the
agricltltural exports of Sub Saharan .4frica. That is its aim is to show whether the
AGOA has increased agricultural exports from SSA to the United States of America.
The researcher employs both descriptive and empirical analysis approaches. Pre and
Post AGOA agricultural export performance of Sub Saharan are among descriptively
analyzed issues. For empirical analysis part, we employ the fixed effect gravity model
of international trade. We take three samples the first is a sample of 46 SSA
countries, Secondly a sample of 30 countries whose average yearly agricultural
exports is >= 500,000 US dollars and finally a sample of 9 major agricultural
exporters in SSA countries. The period of time covered under the study is from 1996•
2007 which is 5 years before the enactment of AGOA and the rest 7 years post AGOA
period.
Our descriptive evidence shows that the AGOA has had insignificant impact on the
agricultural exports of Sub• Saharan Africa.
Similarly the empirical estimates shows for the first sample with 46 SSA countries
AGOA has led to a decline in average exports of SSA by 19%, for the second sample
with 30 SSA countries whose yearly average agricultural exports is >= $ 500,000
AGOA has led to an increase in agricultural exports approximately by 35% on
average, while for the third sample, major agricultural exporters, averagely AGOA
has led to increase in agricultural exports approximately by 18%, but in all the three
samples considered the AGOA dummy was not statistically different from. zero.
Therefore, one may conclude that AGOA has induced neither an increase nor a decline in
SSA agricultural exports to the US.
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Keywords
Agricultural Exports, African Growth