Abstract:
As part of an overall package, open and more liberal trade policies are increasingly being regarded as the main
route towards economic growth and development in this fast globalising world. A number of initiatives,
including the establishment of a various forms of Free Trade Agreements, have been taken by various countries
eying improved terms of trade. This study is an assessment of the ex post bilateral trade effect of Zimbabwe’s
country to country bilateral trade agreements with its SADC trading partners. The major objective was to find
out whether the bilateral trade agreements have been trade creating or trade diverting.Using a country-specific
fixed effects panel data estimation of the gravity model of bilateral trade involving a sample of 10 countries
(Zimbabwe and its 9 trading partners- Botswana, DRC, Madagascar, Malawi, Mozambique, Namibia, South
Africa, Tanzania and Zambia) from 1980 to 2012, the results show that the country to country bilateral trade
agreements have been trade creating and expanding. Another important finding of the study is that trading
partners’ multiple-membership to regional trade agreements has been constraining bilateral trade. The results
therefore indicate that Zimbabwe should negotiate for more bilateral trade agreements especially with closer
countries such as Zambia, Lesotho and Swaziland. More importantly, it adds voice on the calling for the coming
into effect of the establishment of the COMESA-EAC-SADC FTA.
