IMPACT OF THE SPAGHETTI BOWL IN REGIONAL TRADE AGREEMENTS ON TRADE FLOWS IN EASTERN AND SOUTHERN AFRICA: CASE OF MALAWI IN COMESA AND SADC

Abstract

The spaghetti bowl hypothesis states that multiple and overlapping memberships in Free Trade Agreements (FTAs) is problematic globally including on African continent. Malawi is a founding member of two regional blocs namely: the Common Market for Eastern and Southern Africa (COMESA) and the Southern Africa Development Community (SADC). According to the spaghetti bowl hypothesis, a country will turn its own trade creation into a trade diversion by belonging to two or more FTAs, through transaction costs which come with memberships in all these blocs, hence slowing down integration process. This study made an analysis of the impact of this spaghetti bowl on Malawi’s trade flows using both imports and exports as dependent variables for a period of 1997 to 2012. However, contrary to expected results, there is a positive relationship between spaghetti bowl and Malawi’s imports and exports. This means that Malawi does not have to worry about the spaghetti bowl, but strategize on how best it can maximize its benefits.