The COMESA Customs Union: A Quantitative Assessment

Abstract

The member countries of the Common Market for Eastern and Southern Africa (COMESA) have agreed to launch a customs union by December 2008. We provide a quantitative assessment of the likely impacts of the formation of a COMESA customs union, specifically of having free trade among COMESA countries while imposing a common external tariff (CET) against third countries. Along with the MIRAGE CGE model, we use an expanded version of the GTAP Data Base that provides more regional disaggregation in Africa. Alternative COMESA customs union scenarios are designed at the detailed HS6 level, combining information on current applied protection from the 2004 MAcMap data base and the COMESA Tariff Nomenclature. Adoption of the COMESA CET will result in significant liberalization for most COMESA countries but some countries will have to increase protection. We find that the customs union will result in expansion of trade and will be beneficial for some but will result in negative real income for most COMESA countries. The results are diverse due to the heterogeneity of the COMESA economies in terms of their economic structure and trade and protection patterns.

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