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EFFECTS OF EAC AGREEMENT ON TANZANIA’S EXPORTS

초록/요약

ABSTRACT As the EAC reformed again after the collapse of the former one in 1977,the needs to see as weather the new East Africa integration has impact on trade to members economic growth become inevitable study and attract much of interest among of the researchers and policy makers. There are many researches since 1990s which describe the impact on regional trade agreement with trade flows of which the important focus based on trade creation and trade diversion. This paper employs study that focus on investigating the effects of exports trade to Tanzania by being a member of EAC agreement. An econometric model of multiplicative gravity for 22 countries including EAC partner state of which Tanzania has trade agreement were used. The study carried out over the time period of 13 years (2000 to 2013) to assess the impact on exports trade to Tanzania by being in EAC agreement. The results finds existence of a positive and significant impact on Tanzania exports trade by being a member of EAC as compared to non members countries .The empirical result also show positively and significant coefficient on other economic variable and dummy SADC of which Tanzania also has trade agreement . The effect of EAC exports trade of which is a focus of this study is significant and provides meaningful effect for Tanzania exports. The results of our finding have been contributed by closeness between the EAC countries, long-time history of regional integration since 1967 before collapse of former EAC in 1977 and peace exists within the region which helps to assure the good environment to trade.The variable introduces under the gravity equation support the model in providing the significant empirical results that acknowledge an existence of trade creation for the members of EAC (Tanzania) and trade diversion for countries which are not members of EAC. The study recommends that, Tanzania should continue on its membership on EAC agreement by creating more opportunities for her products within the region through the existence of reliable market. Also this study recommend the issues such as NTBs, harmonization of tariffs and export promotion building capacity which should be address to overcome some challenges in order to deepen the EAC integration

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목차

CHAPTER ONE 1
Introduction 1
Background 1
EAC TRADE OVERVIEW 2
EAC TRADE 2
EAC Imports 3
EAC Exports 3
TANZANIA TRADE OVERVIEW 4
Tanzania Imports 4
Tanzania Exports 5
Tanzania Re-exports 6
Tanzania’s Intra-EAC Trade 7
Tanzania Intra EAC Imports 7
Tanzania Exports to EAC Members 8
Statement of the problem 8
Purpose of Study 8
Significance of the Study 9
Limitation of the study 9
CHAPTER TWO 10
Literature Review 10
Theoretical literature 10
Regional trade agreement and Trade 11
Advantages of RTA 11
Disadvantages of RTA 11
Trade Creation and Trade Diversion 12
Empirical Literature 13
CHAPTER THREE 15
Methodology 15
Gravity Model 15
Variables of the Model 16
Dependent variable 16
Independent variables 16
Research Hypotheses 17
Methods 18
Unit Root Test (Levin- Lin-Chu 2002 Test) 19
Hausman Test 19
Feasible Generalized Least Squares (FGLS19
Sources of Data 20
CHAPTER FOUR 21
EMPERICAL RESULT 21
Statistical Descriptions of the Variables 21
Testing for unit root results 22
Levin-Lin-Chu unit-root test results 22
Hausman Test results 23
Regression Results 23
Effects of EAC on Tanzania’s Trade. 25
CHAPTER FIVE 26
CONCLUSION AND RECOMENDATIONS 26
Recommendations 27
REFERENCE 28
Appendix 1A 30
APPENDIX 1B 31
APPENDIX 2A 32
APPENDIX2B 33

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