Impacts of free trade area (FTA) within Eastern and Southern Africa countries and unilateral tariff elimination by other regions

Free trade between countries and regions has become a common practice and yet there are imbalances in both trade flow and trade benefits. One such example is agriculture trade between developed and least developed nations. Developed nations subsidize their farmers and protect against poor farmers ’ commodities from entering their domestic market through various trade barriers. As a result, developing countries like sub-Saharan Africa are languishing in a balance of trade deficit. Moreover, the emergences of free trade areas have created new challenges to some individual countries through preferential erosion and special benefits to countries that joined the block through trade creation. In sub-Saharan Africa, there are regional trade blocks that actually are not working on well-established free trade specifications. Therefore, this study attempts to evaluate the impact of free trade within countries and unilateral or unreciprocated tariff elimination by others. It employs the standard multi-regional applied general equilibrium model developed by global trade analysis project (GTAP) and its version 6 database. Eight countries from Eastern and Southern Africa and four from the world’s biggest economies were selected for the analysis along with three main sectors: agriculture, manufacturing and services. Eighty-seven countries including the above are aggregated into 16 trading blocks, and the sectors are disaggregated into 19 sub-sectors with greater emphasis on agriculture. The simulation results show that within the eight countries, owing to their trading system and economy o