Effects of regional trade agreement (EAC) on Kenya exports: the case of agrifood products

Abstract

The classical economists gave some serious thought to the benefits of trade, although economics of Regional Integration was still a future idea for them. Modern economic analysis has laid considerable emphasis not only on the complex problems of international trade, but also on maximization of trade benefits through regional integration resulting from regional trade agreements. However, the literature on this subject has produced very mixed results as far as benefits to member states are concerned. Winners and losers appear to be in equal strength. This study focuses on Kenya’s exports of agrifood products in the event of EAC-RTA using a gravity model, the results show that the formation of the EAC-RTA has enhanced increased Kenya’s exports to the region and especially for agrifood products. The study also points to chances for higher such trade following modernization of Mombasa and Lamu ports in the near future