| There is considerable disagreement in the literature as to whether the unilateral and non-reciprocal preferences have succeeded in promoting developing countries' exports.This study evaluates the effectiveness of the African Growth and Opportunity Act(AGOA),a case of a developed country's(USA)unilateral and nonreciprocal trade policy preference towards a developing SSA country to shed light on the issue.Botswana has been AGOA eligible since the enactment of the trade policy in 2000.The gravity model was used to examine the Botswana‘s export performance to the US under AGOA.The study used U.S imports data from Botswana for the period of 1992 to 2016.Additional variables which are Gross Domestic Product(GDP)of countries,exchange rate,apparel and textile and AGOA dummy variable were used in this study.The empirical results show that the presence of AGOA has helped in increasing bilateral trade flows between the USA and Botswana,exchange rate,apparel and textile,Botswana GDP also had positive relationship with exports to the U.S while the U.S.GDP has a negative effect.In addition it was noted that the utilization of the program has been sub-par therefore Botswana should learn from other AGOA eligible countries such as Lesotho,Ethiopia and Kenya on how they were able to increase their exports to the US. |
