An empirical investigation on factors determining trade in an FTA: a case study of comesa

Abstract

This paper looks at an empirical analysis of the factors determining trade in an ITA taking the case of COMESA and the trade effect of the recently formed COMESA ITA using the gravity model. The analysis covers the years 2000-2004 in order to capture the period under the FT A. Using a panel data set of nineteen COMESA member countries over the period of fives, the gravity results have shown that GDP, population, distance, common border and ITA are important determinants of trade in the COMESA region. The trade effects of the ITA, also turned out to be trade creating.