IDEAS home Printed from https://ideas.repec.org/p/ags/iffp23/16275.html

Free Trade Agreements And The Sadc Economies

Author

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

Abstract

Countries in Southern Africa have engaged in a variety of trade liberalization initiatives. For example, South Africa and the European Union (EU) negotiated a free trade agreement (FTA) in 1999. The EU unilaterally opened its markets to the least developing countries, which includes some of the countries in the region, in 2001 under its “Everything But Arms” (EBA) initiative. Although not formally established, countries in the region have discussed a SADC FTA. In this paper, we use a multi-country, computable general equilibrium (CGE) model to analyze the impact of trade liberalization on countries, sectors, and factor. To focus on trade flows among countries in Southern Africa, the model includes seven countries in the region (South Africa, Botswana, Malawi, Mozambique, Tanzania, Zambia, and Zimbabwe), the rest of SADC, the rest of Sub-Saharan Africa, and five other aggregate regions (the EU, High-Income Asia, Low-Income Asia, North America, and the rest of the world). First, we analyze the FTA between South Africa and the EU. Then, we consider how the rest of Southern Africa might respond: (1) by enforcing a SADC FTA; (2) by exploiting advantages of unilateral access to the EU in addition to a SADC FTA; and (3) by entering an FTA with the EU and other SADC countries. We find that trade creation dominates trade diversion for the region under all FTA arrangements. Some SADC economies are slightly hurt by the FTA between the EU and South Africa while others slightly gain. Overall, the agreement is not a beggar thy neighbor policy. Unilateral access to the EU is more beneficial, in terms of real GDP and real absorption, for SADC countries than a SADC FTA. However, reciprocal reforms, under an EU-SADC FTA dominate unilateral access to the EU because they require more structural adjustment. 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.

Suggested Citation

  • Lewis, Jeffrey D. & Robinson, Sherman & Thierfelder, Karen, 2001. "Free Trade Agreements And The Sadc Economies," TMD Discussion Papers 16275, CGIAR, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:ags:iffp23:16275
    DOI: 10.22004/ag.econ.16275
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/16275/files/tm010080.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.16275?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
    ---><---

    References listed on IDEAS

    as
    1. Lewis, Jeffrey D. & Robinson, Sherman & Thierfelder, Karen, 1999. "After the negotiations: assessing the impact of free trade agreements in Southern Africa," TMD discussion papers 46, International Food Policy Research Institute (IFPRI).
    2. Lewis, Jeffrey D. & Robinson, Sherman, 1996. "Partners or predators? : the impact of regional trade liberalization on Indonesia," Policy Research Working Paper Series 1626, The World Bank.
    3. Lewis, Jeffrey D. & Robinson, Sherman & Wang, Zhi, 1995. "Beyond the Uruguay Round: The implications of an Asian free trade area," China Economic Review, Elsevier, vol. 6(1), pages 35-90.
    4. Lewis, Jeffrey D. & Robinson, Sherman & Thierfelder, Karen, 1999. "After the negotiations: assessing the impact of free trade agreements in Southern Africa," TMD Discussion Papers 97532, CGIAR, International Food Policy Research Institute (IFPRI).
    5. Crawford, Jo-Ann & Laird, Sam, 2001. "Regional trade agreements and the WTO1," The North American Journal of Economics and Finance, Elsevier, vol. 12(2), pages 193-211, July.
    6. Robinson, Sherman & Thierfelder, Karen, 1999. "Trade liberalization and regional integration: the search for large numbers," TMD Discussion Papers 97554, CGIAR, International Food Policy Research Institute (IFPRI).
    7. 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), pages 1-20.
    8. McDonald, Scott & Walmsley, Terrie, 2001. "Bilateral Free Trade Agreements and Customs Unions: The Impact of the EU South Africa Free Trade Agreement on Botswana," Conference papers 330940, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. 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.
    10. 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 1007-1051, September.
    11. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
    12. 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.
    13. Hinojosa-Ojeda, Raul A. & Robinson, Sherman & Lewis, Jeffrey D., 1995. "Regional integration options for Central America and the Caribbean after NAFTA," The North American Journal of Economics and Finance, Elsevier, vol. 6(2), pages 121-148.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lewis, Jeffrey D. & Robinson, Sherman & Thierfelder, Karen, 1999. "After the negotiations: assessing the impact of free trade agreements in Southern Africa," TMD discussion papers 46, International Food Policy Research Institute (IFPRI).
    2. Jeffrey D. Lewis & Sherman Robinson & Karen Thierfelder, 2003. "Free Trade Agreements and the SADC Economies," Journal of African Economies, Centre for the Study of African Economies, vol. 12(2), pages 156-206, June.
    3. Lewis, Jeffrey D. & Robinson, Sherman & Thierfelder, Karen, 1999. "After the negotiations: assessing the impact of free trade agreements in Southern Africa," TMD Discussion Papers 97532, CGIAR, International Food Policy Research Institute (IFPRI).
    4. Mia Mikic, 2007. "Studies in Trade and Investment - AGRICULTURAL TRADE - PLANTING THE SEEDS OF REGIONAL LIBERALIZATION IN ASIA," STUDIES IN TRADE AND INVESTMENT, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), volume 60, number tipub2451, july-dece.
    5. 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), pages 1-20.
    6. Osman, Rehab Osman Mohamed, . "The EU Economic Partnership Agreements with Southern Africa: a computable general equilibrium analysis," Economics PhD Theses, Department of Economics, University of Sussex Business School, number 0412, December.
    7. Mary E. Burfisher & Sherman Robinson & Karen Thierfelder, 2004. "Regionalism: Old and New, Theory and Practice," Chapters, in: Giovanni Anania & Mary E.. Bohman & Colin A. Carter & Alex F. McCalla (ed.), Agricultural Policy Reform and the WTO, chapter 23, pages 593-622, Edward Elgar Publishing.
    8. Decaluwé, B. & Dumont, J.-C. & Mesplé-Somps, S. & Robichaud, V., 2000. "Union économique et mobilité des facteurs; le cas de l'Union Économique et Monétaire Ouest Africain (UEMOA)," Cahiers de recherche 0009, Université Laval - Département d'économique.
    9. Diao, Xinshen & Diaz-Bonilla, Eugenio & Robinson, Sherman, 2002. "Scenarios For Trade Integration In The Americas," TMD Discussion Papers 16281, CGIAR, International Food Policy Research Institute (IFPRI).
    10. repec:ecr:col025:4399 is not listed on IDEAS
    11. Elbehri, Aziz & MacDonald, Steve, 2003. "Transgenic Cotton and Crop Productivity: A General Equilibrium Analysis for West and Central Africa," Conference papers 331153, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    12. Xiao-guang Zhang & George Verikios, 2006. "Providing Duty-Free Access to Australian Markets for Least-Developed COuntries: a General Equilibrium Analysis," Economics Discussion / Working Papers 06-09, The University of Western Australia, Department of Economics.
    13. Lee, Jong Eun, 2002. "Does Sequence Matter in Free Trade Area?," Conference papers 331010, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    14. Li, Jennifer Chung-I, 2003. "A Dynamic Recursive Analysis of A Carbon Tax Including Local Health Feedback," Conference papers 331085, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    15. Lee, Hiro & Roland-Holst, David W., 1998. "Prelude to the pacific century: Overview of the region, leading issues, and methodology," MPRA Paper 82339, University Library of Munich, Germany.
    16. A. Ganesh Kumar & Gordhan Kumar Saini, 2007. "Economic co-operation in South Asia: The Dilemma of SAFTA and beyond," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2007-017, Indira Gandhi Institute of Development Research, Mumbai, India.
    17. Jayatilleke S. Bandara & Wusheng Yu, 2003. "How Desirable is the South Asian Free Trade Area? A Quantitative Economic Assessment," The World Economy, Wiley Blackwell, vol. 26(9), pages 1293-1323, September.
    18. Alpay, Savas, 2003. "How Can Trade Liberalization Be Conducive to a Better Environment?," Conference papers 331113, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    19. Lee, Hiro, 2001. "General equilibrium evaluation of Japan-Singapore free trade agreement," MPRA Paper 82605, University Library of Munich, Germany.
    20. Susanto, Dwi & Rosson, C. Parr & Adcock, Flynn J., 2007. "Trade Creation and Trade Diversion in the North American Free Trade Agreement: The Case of the Agricultural Sector," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 39(1), pages 121-134, April.
    21. Philippa Dee, 2005. "The Australia-US Free Trade Agreement: An Assessment," Asia Pacific Economic Papers 345, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.

    More about this item

    Keywords

    ;

    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:ags:iffp23:16275. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ifprius.html .

    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.