Trade Effects of the East African Community: Do We Need a Transitional Fund?

25 Pages Posted: 8 Sep 2003

See all articles by Matthias Busse

Matthias Busse

Ruhr-University Bochum; HWWI - Hamburg Institute of International Economics

Rasul Shams

Hamburg Institute of International Economics

Date Written: 2003

Abstract

The paper evaluates the economic necessity and political incentives of a transitional fund for the East African Community (EAC). The fund has been proposed to encounter trade imbalances which may arise due to the intended customs union in East Africa. Using a disaggregated approach at the two-digit level of the Standard International Trade Classification, the paper assesses the overall impact of the EAC on trade flows. Moreover, the commodities that will be particularly affected by the customs union are identified. The results show that considerable trade effects cannot be expected, except for a very narrow range of products. The need for a transitional fund becomes less urgent from this perspective.

Keywords: Customs Union, EAC, Kenya, Tanzania, Uganda

JEL Classification: F15, F17

Suggested Citation

Busse, Matthias and Shams, Rasul, Trade Effects of the East African Community: Do We Need a Transitional Fund? (2003). HWWA Discussion Paper No. 240. Available at SSRN: https://ssrn.com/abstract=439320 or http://dx.doi.org/10.2139/ssrn.439320

Matthias Busse

Ruhr-University Bochum ( email )

Faculty of Management and Economics, GC 3/145
D-44780 Bochum, DE 44780
Germany

HWWI - Hamburg Institute of International Economics

Heimhuder Str. 71
Hamburg, 20148
Germany

Rasul Shams (Contact Author)

Hamburg Institute of International Economics ( email )

Heimhuder Strasse 71
D-20347 Hamburg, DE Hamburg 20148
Germany
+49 40 42834 442 (Phone)

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