South-South Trade: Geography Matters
Résumé
Intra-subsaharan African trade appears to be very limited, an outcome that is often justified on the grounds of the size of the exporting and the importing economies. If that were the explanation, there would be no untapped trade potential. We argue instead that the main determinant of this ‘missing trade' is geography. Being landlocked (and poor) translates into very high trade costs. In this paper, we try to measure the impact of geographical impediments on South–South trade. We focus on the intra and extra regional trade of the countries belonging to the West African Economic and Monetary Union, which have been involved in an integration process since the early days of their independence. We derive and estimate an Armington-based model highlighting the impact of geography and infrastructures on bilateral trade flows within this region.