TRADE, REVENUE AND WELFARE EFFECTS OF EUROPEAN UNION PARTNERSHIP AGREEMENT ON KENYA
Dr. Edwin Jairus Simiyu & Kenadid Ahmed Osman
ABSTRACT
This study offers a quantitative valuation of the possible effects on trade creation, trade diversion, exports, imports, revenue, and welfare effects of the European Partnership (EPA) on Kenya. The study applied the Software for Market Analysis and Restrictions on Trade (SMART) partial equilibrium model for its analysis. The findings of this study shows that the EPA’s will be favorable for Kenya as a country owing to benefits in terms of trade expansion prized at US$ 129.45 million and benefits in consumer welfare effects to the tune of US$ 17.56 8 million. Nevertheless, the country Kenya will incur losses in revenue amounting to US$142.36 million. The export grew by similar quantities of US$ 218.73 million whereas import grew by 129.45 million. The operationalization of the EPA’s should go along with steps to develop revenue collection from other sources like income tax and Value Added Tax