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After the negotiations: assessing the impact of free trade agreements in Southern Africa

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Author Info

  • Lewis, Jeffrey D.
  • Robinson, Sherman
  • Thierfelder, Karen

Abstract

After protracted and difficult negotiations, agreement was recently reached on the dimensions of a South African-EU free trade deal. Because of South Africa's prominence in the sub-region, implementation of this agreement will have an impact not only on South Africa, but on all the SADC economies. This paper traces how this impact may be felt over time, using a multi-region model constructed to focus on the determination of sectoral and geographic trade patterns. By separatelymodeling South Africa and the rest of southern Africa, the model can be used to evaluate how alternative SADC regional trade strategies can influence how the EU deal affects the region's economies; by distinguishing among major trading partners (EU, North America, East Asia), the simulations can help illuminate how the trade deal will likely affect current trade patterns The empirical results lead to a number of conclusions: (1) trade creation dominates trade diversion for the region under all FTA arrangements; (2) the rest of southern Africa benefits from an FTA between the EU and South Africa — the recently signed bilateral agreement is not a “beggar thy neighbor” policy; (3) the rest of southern Africa gains more from zero-tariff access to EU markets than from a partial (50 percent) reduction in global tariffs; and (4) the South African economy is not large enough to serve as a growth pole for the region. Access to EU markets provides substantially bigger gains for the rest of southern Africa than does access to South Africa.

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series TMD discussion papers with number 46.

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Date of creation: 1999
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Handle: RePEc:fpr:tmddps:46

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Keywords: Trade policy Africa.; Free trade.; South Africa.;

References

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  1. de Melo, Jaime & Robinson, Sherman, 1989. "Product differentiation and the treatment of foreign trade in computable general equilibrium models of small economies," Journal of International Economics, Elsevier, vol. 27(1-2), pages 47-67, August.
  2. Hertel, Thomas W & Masters, William A & Elbehri, Aziz, 1998. "The Uruguay Round and Africa: A Global, General Equilibrium Analysis," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 7(2), pages 208-36, July.
  3. Brown, Drusilla K., 1987. "Tariffs, the terms of trade, and national product differentiation," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 503-526.
  4. John Whalley, 1984. "Trade Liberalization among Major World Trading Areas," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262231204.
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Cited by:
  1. Francois, Joseph F. & McQueen, Matthew & Wignaraja, Ganeshan, 2005. "European Union-developing country FTAs: overview and analysis," World Development, Elsevier, vol. 33(10), pages 1545-1565, October.
  2. Oyewumi, Olubukola Ayodeju, 2005. "Modeling tariff rate quotas in the South African livestock industry," Master's Degree Theses 28064, University of the Free State, Department of Agricultural Economics.
  3. Pohl Nielsen, Chantal & Robinson, Sherman & Thierfelder, Karen, 2001. "Genetic Engineering and Trade: Panacea or Dilemma for Developing Countries," World Development, Elsevier, vol. 29(8), pages 1307-1324, August.
  4. Nielsen, Chantal Pohl & Thierfelder, Karen & Robinson, Sherman, 2001. "Genetically modified foods, trade, and developing countries," TMD discussion papers 77, International Food Policy Research Institute (IFPRI).
  5. Lucian Cernat, 2001. "ASSESSING REGIONAL TRADE ARRANGEMENTS: ARE SOUTH–SOUTH RTAs MORE TRADE DIVERTING?," International Trade 0109001, EconWPA.
  6. Oyewumi, Olubukola Ayodeju & Jooste, Andre & van Schalkwyk, Herman D. & Britz, Wolfgang, 2006. "Implications of Tariff Rate Quotas Liberalization in the South African Livestock Industry," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25469, International Association of Agricultural Economists.

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