Title page for ETD etd-01122006-152604


Type of Document Master's Thesis
Author Kwentua, Gregory Emeka
Author's Email Address gkwent1@lsu.edu
URN etd-01122006-152604
Title Trade Creation and Trade Diversion Effects in the EU-South Africa Free Trade Agreement
Degree Master of Science (M.S.)
Department Agricultural Economics & Agribusiness
Advisory Committee
Advisor Name Title
P.Lynn Kennedy Committee Chair
John Westra Committee Member
Wes Harrison Jr. Committee Member
Keywords
  • trade creation and trade diversion
  • bilateral trade
Date of Defense 2005-12-16
Availability unrestricted
Abstract
This study examines trade creation and trade diversion effects in the EUSAFTA using the standard gravity model of bilateral trade flows. The estimation of the gravity equation was carried out using the OLS analysis. In order to ascertain the overall trade creation and trade diversion effects explanatory variables such as GDP, distance and dummy variables were incorporated into the estimation equation to explain bilateral trade flows and exports respectively. The main focus was on the estimation of trade creation and trade diversion effects, resulting from participation in selected regional and preferential trade agreements like EU, COMESA, SACU and EUSAFTA. Additionally, the overall effects of regional and preferential trade agreements are positive and significant indicating that trade agreements, induce and generate huge trade volume among member countries. The trade creation effects of (SACU) were negative. This study demonstrates that participation in Regional and Preferential Trade Agreements stimulates trade between member countries. They also stimulate trade with non-member countries, perhaps as a result of an income effect.
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