The Role of Intra-Regional Agreements on Trade Dynamics: The Case of Southern Africa Development Cooperation (SADC)

Various studies have been published that look at the regulatory frameworks for multilateral trade agreements and their economic advantages studies have examined regulatory environments of multilateral trade agreements, as well as the economic benefits of such arrangements. This study departs from the earlier studies by investigating the specific trade and employment benefits of SADC regional agreement on the member countries. Using annual dataset between 2000 and 2018 from both the SADC statistical centre and World Development Indicators, we deployed various diagnostics approaches to control for econometric biases that may render the results spurious and unreliable. The results of the non-tariff barrier model imply that, similar to export trade costs in the tariff model, investment in technology and the removal of tariff barriers are major factors in enhancing intra-regional trade among SADC nations. Thus, it is suggested that policies should be tailored towards improving export-processing infrastructure and related technological advancement in order to improve trade and alleviate unemployment concomitantly.