PREFERENTIAL TRADE AGREEMENTS BETWEEN THE MONETARY COMMUNITY OF CENTRAL AFRICA AND THE EUROPEAN UNION: STUMBLING OR BUILDING BLOCKS? A GENERAL EQUILIBRIUM APPROACH
Article first published online: 13 NOV 2011
Copyright © 2011 John Wiley & Sons, Ltd.
Journal of International Development
How to Cite
Ngeleza, G. K. and Muhammad, A. (2011), PREFERENTIAL TRADE AGREEMENTS BETWEEN THE MONETARY COMMUNITY OF CENTRAL AFRICA AND THE EUROPEAN UNION: STUMBLING OR BUILDING BLOCKS? A GENERAL EQUILIBRIUM APPROACH. J. Int. Dev.. doi: 10.1002/jid.1838
- Article first published online: 13 NOV 2011
- Manuscript Accepted: 12 SEP 2011
- Manuscript Revised: 2 AUG 2011
- Manuscript Received: 23 APR 2011
- Central Africa;
- regional trade;
- multilateral trade;
- computable general equilibrium model
This paper uses a computable general equilibrium approach to simulate two opposing views describing regional trade agreements either as building blocks for or stumbling blocks to multilateral trade liberalisation. This study focuses on the regional trade agreement between the Economic and Monetary Community of Central Africa (CEMAC) and the European Union (EU). Results show that, although a regional trade agreement may slightly raise welfare among the members of the agreement, the cost to nonmembers can be high. The regional breakdown in our design considers 14 regions, allowing for country-specific analysis for one least-developed country (Democratic Republic of Congo) and one non-least-developed country (Cameroon). Multilateral liberalisation amplifies welfare gain for Cameroon. The Democratic Republic of Congo, with its weaker institutional capacity, is affected negatively. An EU-CEMAC regional free trade agreement without multilateralism produces gains for both Cameroon and the Democratic Republic of Congo. Copyright © 2011 John Wiley & Sons, Ltd.