The impact of climate change and the European Union GSP-scheme on East Africa's horticultural trade

[摘要] With the aim of generating reliable information upon which appropriate decisions can bebased to benefit the various stakeholders, this research at one hand aims at developing a set ofmeteorological indices, which are used as proxies to evaluate the impact of climate change onhorticultural trade flows to the European Union (EU) market. On the other hand, the studyexamines the role of European Union's Generalised System of Preferences (EU-GSP scheme)in boosting agricultural imports into the EU. Furthermore, the study assesses the exportcompetitiveness of various horticultural commodities of East African states within the EUmarket, as well as exploring East Africa's trade potential and performance of the selectedcommodities within the EU.Various techniques were used to attain the above objectives. Such techniques include;Balassa's Revealed Comparative Advantage (RCA) approach, the out-of sample technique,the relative difference and absolute difference methods. To estimate the various gravitymodels specified, a set of the extended Poisson models, viz: Zero Inflated Poisson (ZIP) andNegative Binomial Regression (NBR) techniques for panel data estimations were employedso as to deal with the excess zeros and over dispersion problems associated with highlydisaggregated data. Time series data for a period of 23 years (1988-2011) for 15 EU memberstates and 3 East African states (Kenya, Tanzania and Uganda) were used for the analysis.Data was obtained from various sources such as the TRAINS database, World BankDevelopment Indicators, African Growth and Development Policy Modeling Consortium(AGRODEP) database, Food and Agriculture Organisation (FAO) database, and TYN CY1.11 database provided by the Tyndall Centre for Climate Change Research.Some of the key empirical findings decomposed at country level reveal that:- Kenya has export competitiveness in Asparagus, Mushrooms and truffles. Ugandaexhibits competitiveness in exporting pepper, bananas and eggplants while for Tanzania,vegetables were the most competitive. Therefore, each of these countries should putmuch emphasis on producing and exporting commodities over which she hascomparative advantage. Climate change generally has both positive and negative effects on horticultural tradeflows into the EU-Market, depending on the kind of proxy being put into consideration.Within the EU market, anomalies in precipitation enhance horticultural imports fromEast Africa while temperature anomalies tend to hinder trade. Anomalies in temperaturein exporting countries boost horticultural trade flows from Tanzania and Uganda whilethe contrary is true for Kenya. Precipitation anomalies in exporting countries favorhorticultural trade flows from Kenya while they curtail trade flows from Tanzania andUganda. Thus, results imply that the use of anomalies as proxies for climate change inagrarian based economies provides a more reliable measure of the effects of climatechange in trade than using the generalized Kyoto Protocol policies.- The EU-GSP scheme selectively favors importation of certain horticultural commoditiesinto the EU-market, depending on the country of origin. It promotes importation ofbananas, beans and peppers from Uganda and beans from Tanzania. On the contrary, itdeters asparagus and bean imports from Kenya. Given that the findings concur withfindings of other scholars, it is imperative to argue that the use of preference margin,based on all policy instruments (tariff rates, MFN, specific duties and Tariff RateQuotas) embedded within the EU-GSP scheme provides apt commodity specificinferences regarding the effect of the EU-GSP scheme on horticultural imports into theEU-market.- Kenya and Uganda exhibit existence of un realised trade potential within the EU market.For Kenya, asparagus has room for further market expansion across all EU-memberstates while Uganda's beans and pepper can further be imported many EU memberstates like France, Germany, Luxembourg, Portugal and Greece, among others. Asimilar scenario applies to beans from Tanzania. This implies there is still have room toexpand East Africa's horticultural trade within the EU-market.- The three East African states evidently exhibit poor trade performance within the EUmarketin the various commodities. This suggests that there exists some barriers to tradewhich limit the proliferation of East Africa's horticultural imports into the EU. Thus, itis incumbent upon East African states to foster cooperation in horticultural trade withthe EU member states.. Conclusively, it is commendable that anomalies in temperature and precipitation may be usedas climate change proxies, particularly when evaluating the impact of climate change oninternational trade skewed towards agricultural commodities rather than using other based onKyoto Protocol policies. It is also recommended that assessment of the influence of nonreciprocalpreferential trade agreement(s) granted to developing countries, based onpreference margins should always take into account all the policy instruments embeddedwithin the agreement.

[发布机构] University of the Free State