Computable General Equilibrium Simulations of the COMESA-EAC-SADC Tripartite Free Trade Agreement

Abstract

Building upon earlier work by Willenbockel (2013; MPRA Paper No.51501), this study provides an extended ex-ante computable general equilibrium (CGE) assessment of the Tripartite Free Trade Agreement between the member states of the Common Market for Eastern and Southern Africa, the East African Community and the Southern African Development Community. The CGE approach enables a consistent integrated predictive evaluation of sectoral production and employment impacts, aggregate income and welfare effects of changes in trade barriers while taking full account of the macroeconomic repercussion arising e.g. from terms-of-trade effects, tariff revenue changes and intersectoral input-output linkages. The simulation analysis considers four distinct trade integration scenarios, which are based upon the agreed tariff reduction modalities and differ in their assumptions about export taxes, trade facilitation efforts and labour supply elasticities