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Mega-deals: What Consequences for sub-Saharan Africa?

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  • H. Guimbard
  • M. Le Goff

Abstract

The sub-Saharan African (SSA) countries are excluded from the mega-deals, free trade agreements (FTA) currently under negotiations between several large economies (European Union – United States, European Union - Japan, China-Japan-South Korea…). As Sub-Saharan African exports remain dependent on these large markets, sub-Saharan African countries could undergo important economic impacts. Using a dynamic Computable General Equilibrium Model (CGEM), we find that mega-deals would have a negative impact on the welfare of SSA countries. Regional integration strengthening limited only to the implementation of a “Tripartite” FTA gathering 26 African countries, might limit these losses but could not overcome them. A continental regional trade agreement (RTA) involving all SSA countries would slightly counterbalance the negative impacts of the mega-deals. We also show that openness of SSA countries towards Asia could be a potential solution to avoid trade diversion.

Suggested Citation

  • H. Guimbard & M. Le Goff, 2015. "Mega-deals: What Consequences for sub-Saharan Africa?," Working papers 569, Banque de France.
    • Handle: RePEc:bfr:banfra:569
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    More about this item

    Keywords

    International trade; Mega-deals; Africa.;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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