The Intensity of Trade Creation and Trade Diversion in COMESA, ECCAS and ECOWAS: A Comparative Analysis

This paper uses the gravity model to estimate the intensity of trade creation and trade diversion in COMESA, ECCAS and ECOWAS. Using annual data for the years 1991–8, we find that the intensity of trade creation or diversion varies from region to region and from period to period. The empirical results suggest that the intensity of trade creation is higher in the ECOWAS followed by COMESA. The trade creation effect in the ECCAS is not collaborated empirically. The estimated results also suggest that the trade diversion effects are weak in the three regional organisations. The results reinforce the idea that size factors (level of GNP and population) and resistance factors (distance and language) play an important role in the determination of the flow of international trade.