280 Africa in the New Trade Environment
6. The basic equation estimates Trade flowijt = aij + bijXijt + FEi + FEj + eijt, where Xij represents gravity variables, including the economic size (GDP) of trading countries and the distance between trading countries and other potential determinants of trade, such as common language, contiguity, landlockedness, and membership in a preferential trade agreement, customs union, and the World Trade Organization. FEi and FEj represent exporting and importing country fixed effects. eijt denotes the error term. 7. The IGAD trade bloc comprises eight countries from the Horn of Africa, Nile Valley, and African Great Lakes regions: Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan, and Uganda. 8. The eight RECs recognized by the African Union are the AMU, CENSAD, COMESA, EAC, ECCAS, ECOWAS, IGAD, and SADC. 9. Recent discussion (June 2019) with AfCFTA negotiators revealed that the rules of origin are likely to be product specific. 10. The AfCFTA’s online Non-Tariff Barriers Reporting, Monitoring, and Eliminating Mechanism is a facility developed to enhance trade through removal of NTBs. Open to all businesses—small, medium, and large companies; informal traders; and women and youth operators—it documents reports of any impediments that businesses encounter when trading across borders, including excessive delays, ad hoc fees, cumbersome document requirements, and restrictive product standards and regulations. For more information, see the mechanism’s website at https://tradebarriers.africa/.
References Abrego, L., M. A. Amado, T. Gursoy, G. P. Nicholls, and H. Perez-Saiz. 2019. “The African Continental Free Trade Agreement: Welfare Gains Estimates from a General Equilibrium Model.” Working Paper 19/124, International Monetary Fund, Washington, DC. AfDB (African Development Bank). 2019. African 2019 Outlook Economic. Abidjan, Côte d’Ivoire: AfDB. Arenas, G., and Y. Vnukova. 2019. “Short-Term Revenue Implications of Tariff Liberalization under the African Continental Free Trade Area (AfCFTA).” Unpublished manuscript, World Bank, Washington, DC. Balassa, B. A., 1961. The Theory of Economic Integration. Westport, CT: Greenwood Press. Baldwin, R. E. 1992. “Measurable Dynamic Gains from Trade.” Journal of Political Economy 100 (1): 162–74. Bergsten, C. F. 1991. “Commentary: The Move toward Free Trade Zones.” Economic Review 76: 27–35. Brixiová, Z., Q. Meng, and M. Ncube. 2015.“Can Intra-Regional Trade Act as a Global Shock Absorber in Africa?” London School of Economics (blog),
