Integrating the African market without trade facilitation - Tariffying?

Sammanfattning: A new trade agreement, the African Continental Free Trade Area, was signed in 2018 and will unite the African nations into one trade union. The agreement seeks to integrate the African markets in several ways, with two objectives being to reduce tariffs with 90 percent and improve the level of trade facilitation within the continent. This paper investigates whether tariffs or trade procedures represent the highest barriers to trade in the context of intra-African trade. This is achieved by using a model based on a gravity framework which allows for the estimation of Ad Valorem equivalents of trade facilitation, comparable to tariffs. The results of the study indicate that the effect of a change in time to import on average will have a significant effect on the unit value of intra-African traded goods. Further, the results suggest that there is no significant difference in the effect between different product categories. When comparing trade facilitation Ad Valorem tariff equivalents calculated from the model to applied tariff levels it was found that the reduction of tariffs would remove a greater barrier than improvements in trade facilitation.