Empirical Analysis of Tariff Line- Level Trade, Tariff Revenue and Welfare Effects of Reciprocity under an Economic Partnership Agreement with the EU: Evidence from Malawi and Tanzania

"This paper is the first comprehensive quantitative analysis for Malawi and the first to consider the comparative effects of full and less than full reciprocity for both countries. Moreover, the paper presents results at various levels of product aggregation (lowest aggregation of HS six-digit) to assist identification of products and sectors where effects may be large. Unlike previous studies, this paper considers the “presence” of South Africa in the Southern African Development Community (SADC) – with the approval by the European Union (EU) in December 2006, South Africa abandoned its earlier Trade and Development Cooperation Agreement (TDCA) to renegotiate an economic partnership agreement with the rest of SADC countries including Tanzania. This means reduced trade diversion and increased trade creation, which have important implications for Tanzania’s trade and welfare effects."