Intra-Industry Trade between Members of the PTA/COMESA Regional Trading Arrangement

Using available bilateral trade data between members of the Common Market for Eastern and Southern Africa (COMESA) formerly PTA, this study estimated the extent of Intra-industry trade and the factors that determine this trade in the region. The hypothesis was that intra-industry trade exists in this region. The results of the study show that indeed this trade does exist and it is determined by the same factors as found in other regions. The principal determinant is distance, which has a negative significant relationship with intra-industry trade. Other factors include per capita income and language. The trade is more significant in bordering countries that are relatively more developed in terms of their manufacturing sectors. Special ties also seem to play a role, although the variable was not significant in the regression analysis. Improved communication networks will enhance this trade within the region.