IDEAS home Printed from https://ideas.repec.org/a/taf/deveza/v43y2026i1p110-130.html

Determining the economic effects of a potential SACU-US free trade agreement: A CGE analysis

Author

Listed:
  • Tiroyaone Ambrose Sirang
  • Lorainne Ferreira
  • Waldo Krugell
  • Riaan Rossouw

Abstract

Escalating tariff tensions have recently disrupted global trade dynamics. President Trump's reciprocal tariffs, together with the expiration of African Growth and Opportunity Act (AGOA), signal a significant shift in market access conditions for exports from the South African Customs Union (SACU) to the United States. This paper examines the economic effects of a potential Free Trade Agreement (FTA) between SACU and the United States (US) using a dynamic computable general equilibrium (CGE) model, considering the post-AGOA landscape and 2025 reciprocal tariff developments. The results show that an FTA would raise GDP, industry output, and bilateral trade with the US, although these gains diminish over time. The impact varies across industries, reflecting differences in initial tariff levels and export orientation. The FTA is mildly trade-creating, with minimal trade diversion. Policy recommendations include phased tariff reductions aligned with SACU's export strengths, particularly in AGOA-affected sectors such as vehicles, chemicals, and agriculture. Negotiations should prioritise strengthening SACU-based regional value chains and enhancing export competitiveness to sustain the benefits of the FTA and promote long-term economic resilience.

Suggested Citation

  • Tiroyaone Ambrose Sirang & Lorainne Ferreira & Waldo Krugell & Riaan Rossouw, 2026. "Determining the economic effects of a potential SACU-US free trade agreement: A CGE analysis," Development Southern Africa, Taylor & Francis Journals, vol. 43(1), pages 110-130, January.
    • Handle: RePEc:taf:deveza:v:43:y:2026:i:1:p:110-130
    DOI: 10.1080/0376835X.2026.2620783
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/0376835X.2026.2620783
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/0376835X.2026.2620783?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:deveza:v:43:y:2026:i:1:p:110-130. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CDSA20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.