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<p>Regional trade agreements (RTAs) have become a popular form of trade integration since the establishment of GATT in 1947 and subsequently WTO in 1995. This study investigates the trade effect of the Economic Community of West African States (ECOWAS) FTA signed in 1993 and its evolution over time. Using panel data of the fifteen ECOWAS countries for 1980–2020, we estimate the structural gravity model using the Poisson pseudo-maximum likelihood (PPML) of Silva and Tenreyro (2006)&#xa0;and high-dimensional fixed effects (HDFEs). To control for country heterogeneity and other unobservable characteristics, we included country pair fixed effects, exporter-time and importer-time fixed effects. We found that the ECOWAS FTA has a statistically insignificant effect on members’ intraregional trade. Even after an examination over time and with different time intervals, the study finds no evidence of a significant impact on intraregional trade in ECOWAS. This underscores the need for policy measures to address the impediments to trade within the subregion. The study’s outcomes suggest policy implications to promote trade within ECOWAS and the African Continental Free Trade Area (AfCFTA) to increase the benefits and lower the costs of the proposed currency union project launch intended for 2027.</p>

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The effect of free trade agreement on trade in the Economic Community of West African States (ECOWAS)

  • 期刊论文

  • 发表日期：

    2025年11月1日

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  • Mohamed Sheriff Hamid Kamara

摘要

Regional trade agreements (RTAs) have become a popular form of trade integration since the establishment of GATT in 1947 and subsequently WTO in 1995. This study investigates the trade effect of the Economic Community of West African States (ECOWAS) FTA signed in 1993 and its evolution over time. Using panel data of the fifteen ECOWAS countries for 1980–2020, we estimate the structural gravity model using the Poisson pseudo-maximum likelihood (PPML) of Silva and Tenreyro (2006) and high-dimensional fixed effects (HDFEs). To control for country heterogeneity and other unobservable characteristics, we included country pair fixed effects, exporter-time and importer-time fixed effects. We found that the ECOWAS FTA has a statistically insignificant effect on members’ intraregional trade. Even after an examination over time and with different time intervals, the study finds no evidence of a significant impact on intraregional trade in ECOWAS. This underscores the need for policy measures to address the impediments to trade within the subregion. The study’s outcomes suggest policy implications to promote trade within ECOWAS and the African Continental Free Trade Area (AfCFTA) to increase the benefits and lower the costs of the proposed currency union project launch intended for 2027.