New Working Paper series on trade issues for Africa focuses on regional integration
The World Bank’s Africa Trade Practice is introducing a series of working papers that aims to share new voices and analysis on the critical issues surrounding trade and regional integration. The first installment of the series is a paper by Trade Economist Peter Walkenhorst on Indicators to Monitor Regional Trade Integration in Africa.
Stronger regional integration has been a policy priority in Africa for several decades. Closer trade links with neighboring countries promise to stabilize food markets, enhance profitable exchanges in light manufactures, reduce consumer prices, and help develop regional production networks. However, the implementation of existing integration initiatives has often been lackluster, so that the potential for economic development and reduced poverty from expanded intra-regional trade has remained untapped.
More effective monitoring processes for existing integration arrangements could help to shine a light on issues hampering trade and provide policy makers and civil society with the necessary information to push for change.
Successful implementation of regional integration agreements requires two steps: first, the recasting of trade policies in national laws and second, the de-facto change of trading practices on the ground.
In countries with notable governance challenges and under-resourced administrations, many of them in Africa, the gap between the two implementation steps can be substantial, so that the de-facto implementation of trade reforms remains incomplete and ordinary traders, business people and consumers experience little, if any, benefits from regional integration.
Outside Africa, there are some regional integration initiatives that have started to systematically monitor trade outcomes through indicators that cover not only aggregate trade evolution and tariff reductions, but also non-tariff measures, trade facilitation, and services trade.
Regional trade initiatives in Africa could usefully adopt similar processes and complement their monitoring systems with indirect goods and service trade volume information, as well as specific indicators on trade costs related to tariffs, non-tariff barriers, trade logistics obstacles, and services market regulation.
This series of working papers and much of the work upon which they are based is supported by the Multi-Donor Trust Fund for Trade and Development 2 which is financed by contributions from the governments of Sweden, the United Kingdom and the Netherlands.