This study analysed the factors influencing dairy imports by estimating the effect of the Common Market for East and Southern Africa Free Trade Agreement (COMESA FTA) on dairy trade performance and Malawian economy. The data were obtained from the COMESA and World Bank databases (1990-2029). The empirical analysis from autoregressive distributed lag (ARDL) bounds test and error correction model (ECM) provide evidence of the long-run (cointegration) and short-run relationships between dairy product imports and Comesa free trade agreement, exchange rate and relative prices. The Granger causality (GC) test results suggest a one-way causality running from Comesa free trade agreement and exchange rate to dairy product imports, respectively, and bi-directional causality between dairy product imports and relative price. The results also show that real income has a high and negative elasticity with respect to dairy imports in the short run. The Verdoorn approach was applied to analyse the COMESA FTA effect on dairy trade performance and Malawian economy by computing trade creation and diversion. The results show that free trade has potential to generate welfare gains of about US$0.29 million, and positive net trade effect of US$1.0 million and US$1.02 million in short and long runs, respectively. This suggests that Malawi has benefited from COMESA FTA. Trade complementary index (TCI) was estimated to assess the effectiveness and favourability of free trade. The large estimated TCI (0.944) suggests effective and favourable trade agreement. The policy recommendations drawn include: first, to invest in large- and small-scale dairy enterprises in all the regions of the country to increase milk production for domestic consumption, exports and incomes. Second, to negotiate with COMESA member countries to remove all non-tariff barriers to harness potential regional market opportunities to maintain gains from free trade.