Regulatory convergence and trade: Initial evidence from COMESA–EAC–SADC tripatite free tradearrangement

Abstract

This paper provides the first systematic empirical assessment of how regulatory convergence within the COMESA–EAC–SADC Tripartite Free Trade Area (TFTA) affects trade flows among the 29 Member/Partner States. Using a newly constructed dataset that maps the harmonisation of technical regulations, sanitary and phytosanitary measures, rules of origin, and competition policy from 2010 to 2023, we estimate a structural gravity model augmented with time-varying indices of regulatory alignment.

Main findings:

We find that each standard deviation increase in regulatory convergence is associated with a 12–18% rise in bilateral trade, with the largest gains accruing to agricultural and processed-food products where standards previously diverged most sharply. The effect is strongest for EAC members—who already share a relatively harmonised regulatory regime—and weakest for SADC exporters facing more complex product-specific rules of origin.

Counterfactual simulations:

Counterfactual simulations suggest that full convergence to best-practice EAC levels could expand intra-TFTA trade by up to 34%, equivalent to an additional US$9 billion annually, and disproportionately benefit smaller economies through improved market access and reduced compliance costs.

Remaining constraints:

However, residual non-tariff barriers, notably administrative procedures and mutual recognition gaps, continue to mute the gains from regulatory harmonisation.

Conclusion:

Our findings indicate that while the TFTA’s explicit focus on regulatory convergence is already bearing fruit, accelerating implementation of common conformity-assessment procedures and digital NTB-monitoring systems will be critical for realising the arrangement’s ambitious trade-creation potential.

IPRAA WORKING PAPER 71

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