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Journal of African Economies Advance Access originally published online on April 8, 2005
Journal of African Economies 2005 14(3):327-358; doi:10.1093/jae/eji006
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© The author 2005. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. all rights reserved. For permissions, please email: journals.permissions@oupjournals.org

Some Simple Analytics of the Trade and Welfare Effects of Economic Partnership Agreements

Chris Milnera,1, Oliver Morrisseya and Andrew McKayb,2

a University of Nottinghamb University of Bath

The Cotonou Agreement, successor to the Lomé Convention, offers African, Caribbean and Pacific (ACP) countries preferential access to EU markets by establishing economic partnership agreements (EPAs) between the EU and blocks of ACP countries that are members of regional trading arrangements. ACP countries entering such arrangements could retain preferential access to the EU market, but on a reciprocal basis. This paper presents a relatively simple method (with moderate data requirements) to measure the likely short-run welfare consequences, static effects on trade flows and tariff revenue, of such an arrangement for ACP countries. The partial equilibrium method is illustrated for the case of the East African Cooperation (Kenya, Tanzania and Uganda). The analysis suggests that the welfare effects (excluding revenue effects) from a reciprocal agreement with the EU will be small, whether positive or negative, but ACP countries will experience short-run adjustment costs, especially in the form of revenue losses.

1 Chris Milner is the corresponding author, e-mail: chris.milner{at}nottingham.ac.uk

2 The authors are grateful for helpful comments received from two anonymous referees, and on earlier versions from participants at the DESG Annual Conference 2000, University of Nottingham, 27–29 March 2000 and the 10th General Conference of EADI, Ljubljana, 19–21 September 2002. This is a substantially revised version of McKay et al. (2000), based on work undertaken for the European Commission (McKay et al., 1998), but the views expressed here are those of the authors alone.


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A. Keck and R. Piermartini
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J. Afr. Econ., January 1, 2008; 17(1): 85 - 130.
[Abstract] [Full Text] [PDF]


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