The effect of free trade agreement on trade in the Economic Community of West African States (ECOWAS)

Mohamed Sheriff Hamid Kamara ()
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Mohamed Sheriff Hamid Kamara: University of Sharjah

International Economics and Economic Policy, 2026, vol. 23, issue 1, No 4, 26 pages

Abstract: Abstract Regional trade agreements (RTAs) have become a popular form of trade integration since the establishment of GATT in 1947 and subsequently WTO in 1995. This study investigates the trade effect of the Economic Community of West African States (ECOWAS) FTA signed in 1993 and its evolution over time. Using panel data of the fifteen ECOWAS countries for 1980–2020, we estimate the structural gravity model using the Poisson pseudo-maximum likelihood (PPML) of Silva and Tenreyro (Rev Econ Stat 88:641-658, 2006) and high-dimensional fixed effects (HDFEs). To control for country heterogeneity and other unobservable characteristics, we included country pair fixed effects, exporter-time and importer-time fixed effects. We found that the ECOWAS FTA has a statistically insignificant effect on members’ intraregional trade. Even after an examination over time and with different time intervals, the study finds no evidence of a significant impact on intraregional trade in ECOWAS. This underscores the need for policy measures to address the impediments to trade within the subregion. The study’s outcomes suggest policy implications to promote trade within ECOWAS and the African Continental Free Trade Area (AfCFTA) to increase the benefits and lower the costs of the proposed currency union project launch intended for 2027.

Keywords: International trade; Free trade agreement; Regional trade agreement; Economic integration; Optimum currency area; Gravity model (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 F33 (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1007/s10368-025-00699-z

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