A Quantitative Assessment of the COMESA Customs Union

Abstract

This study provides a quantitative assessment of the potential impacts of the formation of a COMESA customs union, specifically of having free trade among COMESA countries while imposing a common external tariff against imports from outside COMESA. The study uses an expanded version of the Global Trade Analysis Project (GTAP) database and capitalizes on the Modeling International Relationships in Applied General Equilibrium (MIRAGE) Computable General Equilibrium (CGE) model for analysis. Two different assumptions are made regarding the number of sensitive products excluded from the CET rates—2 percent or 5 percent. The simulation exercise involved four scenarios to compare the impacts of the customs union under two alternative specifications of sensitive products, and the impacts of three alternative membership assumptions on the COMESA region. The alternative COMESA customs union scenarios are designed at the detailed Harmonized System at the six digit level (HS6), combining information on the current applied protection from the 2004 MAcMap data base and the COMESA Tariff Nomenclature.