UEMOA, CEMAC: What performance regarding trade?

In this paper we aim to identify the trade performance of both the West African Economic and Monetary Union (UEMOA) and the Central African Economic and Monetary Community (CEMAC) over the period 1995-2010. First, based on a decomposition of an export diversification index we find evidence of two trends: (i) in both areas a clear diversification appears at the extensive margin, i.e. exports of new products, (ii) diversification of intra-areas exports are significantly higher than diversification of exports of members countries with the rest of the World. Second, we look at the trade flows of industrial products in a panel gravity equation. Three main patterns emerge: (i) While both UEMOA and CEMAC have on average generated some trade diversion only UEMOA presents significant additional intra-regional trade, i.e. trade creation; (ii) the stability of exchange rate due to the common currency has reinforced the intra-regional trade while dampening the negative trade diversion; (iii) gains from regional integration are unevenly distributed amongst member countries. Countries that were more concentrated in their exports when the regional agreements have been implemented have faced a large trade diversion while countries with a relative initial diversification in their export bundles have benefited from an increase in their exports towards other members with no evidence of trade diversion.