Common External Tariffs and Trade Efficiency: Lessons for Cross-listed Firms in the East African Community

Abwao Geofrey Magani

doi:doi:10.11648/j.ipa.20190302.12

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Common External Tariffs and Trade Efficiency: Lessons for Cross-listed Firms in the East African Community

Abwao Geofrey Magani

Published in International and Public Affairs (Volume 3, Issue 2)

Received: 1 July 2019 Accepted: 7 August 2019 Published: 4 September 2019

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Abstract

The East African Community’s trading bloc has attracted a lot of investment from the member countries yet it has not lived to its expectations. Some of the region’s members have fallen out in the past and even re-considered their membership in EAC. Among other areas of focus on the region’s integration is the implementation of common external tariffs and protection of the region’s members in regional and global market spheres. However, trade efficiency still lags behind in the region compared to global benchmarks. There exists flimsy evidence in literature on whether the implementation of common external tariffs revitalizes trade efficiency in the region. This paper, therefore, propounds the relationship between the implementation of common external tariffs and cross-border trade efficiency within the EAC considering experiences from other regional blocs and the implications for cross-listed Kenyan firms. The paper analyzes secondary data for Kenyan imports and exports from World Integrated Trade Solution (WITS) and the Observatory of Economic Complexity (OEC) as well as Economic review reports from the World Bank, the African Development Bank (AfDB) and EAC. The analysis covering the financial years: 1995 to 2017 shows a number of factors, other than tariffs, that drive trade and trade efficiency. The study also reveals non-tariff barriers, inward-looking trade policies, protectionist policies, redundant trading rules across border, increasing cost of trading among other shortcomings to regional trade that arise from implementation of common external tariffs. Statistical evidence also indicate that trade efficiency is independent of the implementation of common external tariffs. In addition, empirical evidence shows prolonged trade deficit not only in the developed countries, but in the developing world as well. The study concludes that tariffs are good for trade regulation to the detriment cross-border trading even beyond the regional bloc. However, besides macroeconomic correlates, factors other than common external tariffs influence regional and cross-border trade efficiency. This calls for comprehensive in-region trade policy review, revitalization and commitment by the member states even as individual trading entities pursue advanced competitiveness in the regional and global markets.

Published in	International and Public Affairs (Volume 3, Issue 2)
DOI	10.11648/j.ipa.20190302.12
Page(s)	43-51
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Common External Tariffs, Cross-Listing, Cross-Border Trading Efficiency

References

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Abwao Geofrey Magani. (2019). Common External Tariffs and Trade Efficiency: Lessons for Cross-listed Firms in the East African Community. International and Public Affairs, 3(2), 43-51. https://doi.org/10.11648/j.ipa.20190302.12

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Abwao Geofrey Magani. Common External Tariffs and Trade Efficiency: Lessons for Cross-listed Firms in the East African Community. Int. Public Aff. 2019, 3(2), 43-51. doi: 10.11648/j.ipa.20190302.12

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AMA Style

Abwao Geofrey Magani. Common External Tariffs and Trade Efficiency: Lessons for Cross-listed Firms in the East African Community. Int Public Aff. 2019;3(2):43-51. doi: 10.11648/j.ipa.20190302.12

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@article{10.11648/j.ipa.20190302.12,
  author = {Abwao Geofrey Magani},
  title = {Common External Tariffs and Trade Efficiency: Lessons for Cross-listed Firms in the East African Community},
  journal = {International and Public Affairs},
  volume = {3},
  number = {2},
  pages = {43-51},
  doi = {10.11648/j.ipa.20190302.12},
  url = {https://doi.org/10.11648/j.ipa.20190302.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ipa.20190302.12},
  abstract = {The East African Community’s trading bloc has attracted a lot of investment from the member countries yet it has not lived to its expectations. Some of the region’s members have fallen out in the past and even re-considered their membership in EAC. Among other areas of focus on the region’s integration is the implementation of common external tariffs and protection of the region’s members in regional and global market spheres. However, trade efficiency still lags behind in the region compared to global benchmarks. There exists flimsy evidence in literature on whether the implementation of common external tariffs revitalizes trade efficiency in the region. This paper, therefore, propounds the relationship between the implementation of common external tariffs and cross-border trade efficiency within the EAC considering experiences from other regional blocs and the implications for cross-listed Kenyan firms. The paper analyzes secondary data for Kenyan imports and exports from World Integrated Trade Solution (WITS) and the Observatory of Economic Complexity (OEC) as well as Economic review reports from the World Bank, the African Development Bank (AfDB) and EAC. The analysis covering the financial years: 1995 to 2017 shows a number of factors, other than tariffs, that drive trade and trade efficiency. The study also reveals non-tariff barriers, inward-looking trade policies, protectionist policies, redundant trading rules across border, increasing cost of trading among other shortcomings to regional trade that arise from implementation of common external tariffs. Statistical evidence also indicate that trade efficiency is independent of the implementation of common external tariffs. In addition, empirical evidence shows prolonged trade deficit not only in the developed countries, but in the developing world as well. The study concludes that tariffs are good for trade regulation to the detriment cross-border trading even beyond the regional bloc. However, besides macroeconomic correlates, factors other than common external tariffs influence regional and cross-border trade efficiency. This calls for comprehensive in-region trade policy review, revitalization and commitment by the member states even as individual trading entities pursue advanced competitiveness in the regional and global markets.},
 year = {2019}
}

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TY  - JOUR
T1  - Common External Tariffs and Trade Efficiency: Lessons for Cross-listed Firms in the East African Community
AU  - Abwao Geofrey Magani
Y1  - 2019/09/04
PY  - 2019
N1  - https://doi.org/10.11648/j.ipa.20190302.12
DO  - 10.11648/j.ipa.20190302.12
T2  - International and Public Affairs
JF  - International and Public Affairs
JO  - International and Public Affairs
SP  - 43
EP  - 51
PB  - Science Publishing Group
SN  - 2640-4192
UR  - https://doi.org/10.11648/j.ipa.20190302.12
AB  - The East African Community’s trading bloc has attracted a lot of investment from the member countries yet it has not lived to its expectations. Some of the region’s members have fallen out in the past and even re-considered their membership in EAC. Among other areas of focus on the region’s integration is the implementation of common external tariffs and protection of the region’s members in regional and global market spheres. However, trade efficiency still lags behind in the region compared to global benchmarks. There exists flimsy evidence in literature on whether the implementation of common external tariffs revitalizes trade efficiency in the region. This paper, therefore, propounds the relationship between the implementation of common external tariffs and cross-border trade efficiency within the EAC considering experiences from other regional blocs and the implications for cross-listed Kenyan firms. The paper analyzes secondary data for Kenyan imports and exports from World Integrated Trade Solution (WITS) and the Observatory of Economic Complexity (OEC) as well as Economic review reports from the World Bank, the African Development Bank (AfDB) and EAC. The analysis covering the financial years: 1995 to 2017 shows a number of factors, other than tariffs, that drive trade and trade efficiency. The study also reveals non-tariff barriers, inward-looking trade policies, protectionist policies, redundant trading rules across border, increasing cost of trading among other shortcomings to regional trade that arise from implementation of common external tariffs. Statistical evidence also indicate that trade efficiency is independent of the implementation of common external tariffs. In addition, empirical evidence shows prolonged trade deficit not only in the developed countries, but in the developing world as well. The study concludes that tariffs are good for trade regulation to the detriment cross-border trading even beyond the regional bloc. However, besides macroeconomic correlates, factors other than common external tariffs influence regional and cross-border trade efficiency. This calls for comprehensive in-region trade policy review, revitalization and commitment by the member states even as individual trading entities pursue advanced competitiveness in the regional and global markets.
VL  - 3
IS  - 2
ER  -

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Abwao Geofrey Magani

Department of Commerce and Economics, School of Business, Jomo Kenyatta University of Agriculture & Technology, Nairobi, Kenya

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Abwao Geofrey Magani. (2019). Common External Tariffs and Trade Efficiency: Lessons for Cross-listed Firms in the East African Community. International and Public Affairs, 3(2), 43-51. https://doi.org/10.11648/j.ipa.20190302.12

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Abwao Geofrey Magani. Common External Tariffs and Trade Efficiency: Lessons for Cross-listed Firms in the East African Community. Int. Public Aff. 2019, 3(2), 43-51. doi: 10.11648/j.ipa.20190302.12

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AMA Style

Abwao Geofrey Magani. Common External Tariffs and Trade Efficiency: Lessons for Cross-listed Firms in the East African Community. Int Public Aff. 2019;3(2):43-51. doi: 10.11648/j.ipa.20190302.12

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@article{10.11648/j.ipa.20190302.12,
  author = {Abwao Geofrey Magani},
  title = {Common External Tariffs and Trade Efficiency: Lessons for Cross-listed Firms in the East African Community},
  journal = {International and Public Affairs},
  volume = {3},
  number = {2},
  pages = {43-51},
  doi = {10.11648/j.ipa.20190302.12},
  url = {https://doi.org/10.11648/j.ipa.20190302.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ipa.20190302.12},
  abstract = {The East African Community’s trading bloc has attracted a lot of investment from the member countries yet it has not lived to its expectations. Some of the region’s members have fallen out in the past and even re-considered their membership in EAC. Among other areas of focus on the region’s integration is the implementation of common external tariffs and protection of the region’s members in regional and global market spheres. However, trade efficiency still lags behind in the region compared to global benchmarks. There exists flimsy evidence in literature on whether the implementation of common external tariffs revitalizes trade efficiency in the region. This paper, therefore, propounds the relationship between the implementation of common external tariffs and cross-border trade efficiency within the EAC considering experiences from other regional blocs and the implications for cross-listed Kenyan firms. The paper analyzes secondary data for Kenyan imports and exports from World Integrated Trade Solution (WITS) and the Observatory of Economic Complexity (OEC) as well as Economic review reports from the World Bank, the African Development Bank (AfDB) and EAC. The analysis covering the financial years: 1995 to 2017 shows a number of factors, other than tariffs, that drive trade and trade efficiency. The study also reveals non-tariff barriers, inward-looking trade policies, protectionist policies, redundant trading rules across border, increasing cost of trading among other shortcomings to regional trade that arise from implementation of common external tariffs. Statistical evidence also indicate that trade efficiency is independent of the implementation of common external tariffs. In addition, empirical evidence shows prolonged trade deficit not only in the developed countries, but in the developing world as well. The study concludes that tariffs are good for trade regulation to the detriment cross-border trading even beyond the regional bloc. However, besides macroeconomic correlates, factors other than common external tariffs influence regional and cross-border trade efficiency. This calls for comprehensive in-region trade policy review, revitalization and commitment by the member states even as individual trading entities pursue advanced competitiveness in the regional and global markets.},
 year = {2019}
}

Copy | Download

TY  - JOUR
T1  - Common External Tariffs and Trade Efficiency: Lessons for Cross-listed Firms in the East African Community
AU  - Abwao Geofrey Magani
Y1  - 2019/09/04
PY  - 2019
N1  - https://doi.org/10.11648/j.ipa.20190302.12
DO  - 10.11648/j.ipa.20190302.12
T2  - International and Public Affairs
JF  - International and Public Affairs
JO  - International and Public Affairs
SP  - 43
EP  - 51
PB  - Science Publishing Group
SN  - 2640-4192
UR  - https://doi.org/10.11648/j.ipa.20190302.12
AB  - The East African Community’s trading bloc has attracted a lot of investment from the member countries yet it has not lived to its expectations. Some of the region’s members have fallen out in the past and even re-considered their membership in EAC. Among other areas of focus on the region’s integration is the implementation of common external tariffs and protection of the region’s members in regional and global market spheres. However, trade efficiency still lags behind in the region compared to global benchmarks. There exists flimsy evidence in literature on whether the implementation of common external tariffs revitalizes trade efficiency in the region. This paper, therefore, propounds the relationship between the implementation of common external tariffs and cross-border trade efficiency within the EAC considering experiences from other regional blocs and the implications for cross-listed Kenyan firms. The paper analyzes secondary data for Kenyan imports and exports from World Integrated Trade Solution (WITS) and the Observatory of Economic Complexity (OEC) as well as Economic review reports from the World Bank, the African Development Bank (AfDB) and EAC. The analysis covering the financial years: 1995 to 2017 shows a number of factors, other than tariffs, that drive trade and trade efficiency. The study also reveals non-tariff barriers, inward-looking trade policies, protectionist policies, redundant trading rules across border, increasing cost of trading among other shortcomings to regional trade that arise from implementation of common external tariffs. Statistical evidence also indicate that trade efficiency is independent of the implementation of common external tariffs. In addition, empirical evidence shows prolonged trade deficit not only in the developed countries, but in the developing world as well. The study concludes that tariffs are good for trade regulation to the detriment cross-border trading even beyond the regional bloc. However, besides macroeconomic correlates, factors other than common external tariffs influence regional and cross-border trade efficiency. This calls for comprehensive in-region trade policy review, revitalization and commitment by the member states even as individual trading entities pursue advanced competitiveness in the regional and global markets.
VL  - 3
IS  - 2
ER  -

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