Free Trade Agreements and the SADC Economies
AbstractCountries in southern Africa have engaged in a variety of trade liberalisation initiatives such as the European Union (EU)--South Africa Free Trade Agreement (FTA), the EU's 'Everything but Arms' (EBA) initiative to eliminate trade barriers against imports from the least developed countries and a potential FTA among Southern African Development Community (SADC) countries. In this paper we use a multi-country computable general equilibrium (CGE) model to analyse the impact of trade liberalisation in the region. First, we analyse the FTA between South Africa and the EU. Then, we consider how the rest of southern Africa might respond: (i) by enforcing an SADC FTA; (ii) by exploiting the advantages of unilateral access to the EU in addition to an SADC FTA; and (iii) by entering an FTA with the EU and other SADC countries. The scenarios are ordered such that the SADC countries pursue increased trade liberalisation. We find that under all FTA arrangements the increased total imports from FTA partners exceeds the reduction in imports from non-FTA partners -- the FTAs examined are all net trade creating. Some SADC economies are slightly hurt by the FTA between the EU and South Africa, while others gain slightly. Overall, the agreement is not a beggar-thy-neighbour policy. We also find that unilateral access to the EU is more beneficial for SADC countries than an SADC FTA because the SADC countries trade more with the EU than with each other. However, reciprocal reforms under an EU--SADC FTA dominate unilateral access to the EU because they require more structural adjustment in the SADC countries. Finally, we find that South Africa is not large enough to serve as a growth pole for the region. Access to EU markets provides substantially bigger gains for the other SADC countries than access to South Africa. Copyright 2003, Oxford University Press.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Centre for the Study of African Economies (CSAE) in its journal Journal of African Economies.
Volume (Year): 12 (2003)
Issue (Month): 2 (June)
Contact details of provider:
Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Phone: +44-(0)1865 271084
Fax: 01865 267 985
Web page: http://www.jae.oupjournals.org/
More information through EDIRC
Other versions of this item:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Walmsley, Terrie & Scott McDonald, 2003.
"Bilateral Free Trade Agreements and Customs Unions: The Impact of the EU Republic of South Africa Free Trade Agreement on Botswana,"
GTAP Working Papers
1644, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Scott McDonald & Terrie Walmsley, 2008. "Bilateral Free Trade Agreements and Customs Unions: The Impact of the EU Republic of South Africa Free Trade Agreement on Botswana," The World Economy, Wiley Blackwell, vol. 31(8), pages 993-1029, 08.
- Robinson, Sherman & Thierfelder, Karen, 2002.
"Trade liberalisation and regional integration: the search for large numbers,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 46(4), December.
- Robinson, Sherman & Thierfelder, Karen, 1999. "Trade liberalization and regional integration: the search for large numbers," TMD discussion papers 34, International Food Policy Research Institute (IFPRI).
- Arvind Panagariya, 2000. "Preferential Trade Liberalization: The Traditional Theory and New Developments," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 287-331, June.
- Shoven,John B. & Whalley,John, 1992.
"Applying General Equilibrium,"
Cambridge University Press, number 9780521266550.
- Devarajan, Shantayanan & Lewis, Jeffrey D & Robinson, Sherman, 1993. "External Shocks, Purchasing Power Parity, and the Equilibrium Real Exchange Rate," World Bank Economic Review, World Bank Group, vol. 7(1), pages 45-63, January.
- John Whalley, 1984. "Trade Liberalization among Major World Trading Areas," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262231204.
- Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-51, September.
- Brown, Drusilla K., 1987. "Tariffs, the terms of trade, and national product differentiation," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 503-526.
- Baldwin, Richard E. & Venables, Anthony J., 1995. "Regional economic integration," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 31, pages 1597-1644 Elsevier.
- Soamiely Andriamananjara & Russell Hillberry, 2001. "Regionalism, Trade And Growth: The Case Of The Eu-South Africa Free Trade Arrangement," International Trade 0108001, EconWPA.
- Devaragan, Shantayanan & Lewis, Jeffrey D. & Robinson, Sherman, 1990. "Policy lessons from trade-focused, two-sector models," Journal of Policy Modeling, Elsevier, vol. 12(4), pages 625-657.
- Scott McDonald & Terrie Walmsley, 2004. "Preferential Trade Agreements and the Optimal Liberalisation of Agricultural Trade," Working Papers 2004010, The University of Sheffield, Department of Economics, revised Aug 2004.
- Walkenhorst, Peter, 2005. "Trade Policy Developments in Tanzania: The Challenge of Global and Regional Integration," MPRA Paper 23399, University Library of Munich, Germany.
- Jean-Marc Philip, 2006. "Le recours aux MEGC pour l’analyse de l’accord de partenariat économique entre l’union européenne et les pays ACP : une revue de la littérature," CAE Working Papers 92, Aix-Marseille Université, CERGAM.
- Padamja Khandelwal, 2004. "COMESA and SADC: Prospects and Challenges for Regional Trade Integration," IMF Working Papers 04/227, International Monetary Fund.
- Nielsen, Chantal Pohl & Thierfelder, Karen & Robinson, Sherman, 2003. "Consumer preferences and trade in genetically modified foods," Journal of Policy Modeling, Elsevier, vol. 25(8), pages 777-794, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.