Roseline T Karambakuwa

Comparative advantage and economic performance of East African Community (EAC) member states

Abstract The researchers have investigated comparative advantage in the East African Community member states. They have also investigated economic performance of the member states. Balassa’s Revealed Comparative Advantage (RCA) index was used to establish member states’ comparative advantage. An analysis of real GDP, employment levels and stability of exchange rates was used to measure their economic performance. The results show Kenya has comparative advantage in 471 product codes, Tanzania in 471 products, Uganda in 437 product codes, Rwanda in 275 products codes and Burundi in 152 product codes. There is therefore evidence that the member states have revealed comparative advantage although in limited products and that economic indicators show they have performed well. However, there is a need that GDP growth rates should exceed population growth rates in order to have sustainable economic growth.

Does Mercosur Possess Comparative Advantage

Abstract The researchers investigated comparative advantage in MERCOSUR. The main objective was to find out whether MERCOSUR member states possess comparative advantage. Balassa’s Revealed Comparative Advantage (RCA) technique was applied. Brazil was found to have comparative advantage in 674 product lines, Argentina in 518 product lines, Paraguay in 485 product lines, Uruguay 312 product lines and Venezuela in 83 product lines. The researchers concluded that MERCOSUR indeed has comparative advantage although the number of products in which it has comparative advantage is very limited. They therefore recommended that MERCOSUR should consider admitting more members in order to improve the number of the products in which comparative advantage may be revealed.

An Empirical Application of the Gravity Model to Assess the Trade Potential of Comprehensive Economic Partnership Agreements between the European Union and Southern African Countries

Abstract The research sought to assess the determinants of trade flows between European Union and Southern African countries for the period 2001 to 2012, and to determine the trade potential of a Comprehensive Economic Partnership Agreement between the European Union and Southern African countries. Econometric modeling was done using the gravity model of trade. Estimation was done using the fixed effects model. The research concluded that the factors that had a positive relationship with trade flows between Southern African and European Union countries were population and GDP of Southern African countries. Interim EPAs were found to be reducing the trade flows, meaning that the impending comprehensive EPAs had the potential to reduce trade flows between the two groupings.

Trade liberalization: is it a useful program for agricultural and manufacturing sectors in developing countries?

The authors investigated whether trade liberalization is a useful programme for agricultural and manufacturing sectors in the developing countries. A historical approach was used to measure impact. There are mixed results regarding the impact of trade liberalization. The results which show negative impact are generalized without being very exact the nature of impact. The results which show positive impact of trade liberalization have generally based their evidence on real GDP and per capita income growth rates while ignoring other factors which contribute to their growth. Two schools of thought have emerged namely pro-trade liberalization and those against trade liberalization. Indicators are purposely chosen and the results support that school of thought. It is recommended that studies of trade liberalization use a number of indicators to measure impact. That studies should be able to iso;ate other influences on the indicator before making conclusions. There is a need to come up with uniform indicators to measure impact. A developing country should initiate a comprehensive study of its economy before entering zero tariff agreement with developed country. Developing countries should attract transnational corporations to improve efficiency. Policies which encourage redistribution of incomes should be introduced.