Egyptian intra agriculture trade with GAFTA members: Reilly's law of retail gravitation and marketing effects

GAFTA provides a good opportunity for the greater regional agriculture trade among its member countries and Egypt is reaping maximum advantage in terms of her agriculture trade.This study explores the gravity model by utilizing Pooled Mean Group (PMG) estimators among 16 members of Greater Arab Free Trade Area(GAFTA) regional agricultural trade by using a period 1990-2015. The results of this study confirm that Egyptian Gross Domestic Product (GDP) and population are negatively influencing the agriculture balance of trade of Egypt by increasing local demand for agriculture products. On the other hand, GAFTA partners' GDP and population are not showing effectiveness for Egypt exports and these are not helping the balance of trade to grow resultantly. Further, depreciation of Egyptian currency is helping in promotion of agriculture trade in the long run. Furthermore, we have also found an evidence for J-curve effect of depreciation in our estimations. Therefore, depreciation may also be helpful in improving agriculture balance of trade in long run. Further, there is need for a marketing mix to promote Egyptian product as GAFTA partners' GDP and population are showing insignificant effects on the Egyptian agriculture exports.