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How important is a regional free trade area for Southern Africa?: Potential impacts and structural constraints

  • Nin Pratt, Alejandro
  • Diao, Xinshen
  • Bahta, Yonas

"We develop a detailed trade analysis to assess the potential welfare impacts of a free trade agreement (FTA) on the agricultural sector of southern African countries and to determine opportunities and challenges faced by the region as a consequence of the agreement. Our approach combines an in-depth look at the current trading patterns of southern African countries with the application of a partial equilibrium analysis that uses bilateral trade data at the four-digit standard international trade classification (SITC) level for 193 agricultural industries in 14 southern African countries. Low diversification of agricultural exports in most southern African countries seems to be a major constraint for promoting regional trade. In most countries, overall welfare effects of an FTA would be positive but small. Inefficient agricultural producers with a regional comparative advantage for agriculture would benefit from trade creation with the rest of the world. Welfare results for regional importers would be negative because of increased imports from inefficient regional producers. These results suggest that the region should be looking at regional policies and interventions beyond trade arrangements, such as those targeting investment, agricultural productivity, and diversification, to enhance benefits of regional trade liberalization." from authors' abstract

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Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 888.

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Date of creation: 2009
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Handle: RePEc:fpr:ifprid:888
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  1. Diao, Xinshen & Dorosh, Paul A. & Rahman, Shaikh Mahfuzur, 2003. "Market opportunities for African agriculture," DSGD discussion papers 1, International Food Policy Research Institute (IFPRI).
  2. Xinshen Diao & Terry Roe & Agapi Somwaru, 2002. "Developing Country Interests in Agricultural Reforms under the World Trade Organization," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 782-790.
  3. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
  4. Antoine Bouët & Yvan Decreux & Lionel Fontagné & Sébastien Jean & David Laborde, 2004. "A Consistent, Ad-Valorem Equivalent Measure of Applied Protection Across the World: The MAcMap-HS6 Database," Working Papers 2004-22, CEPII research center.
  5. Grossman, Gene M & Helpman, Elhanan, 1995. "The Politics of Free-Trade Agreements," American Economic Review, American Economic Association, vol. 85(4), pages 667-90, September.
  6. Maasdorp, Gavin, 1998. "Regional trade and food security in SADC1," Food Policy, Elsevier, vol. 23(6), pages 505-518, December.
  7. Christian Broda & Joshua Greenfield & David Weinstein, 2006. "From Groundnuts to Globalization: A Structural Estimate of Trade and Growth," NBER Working Papers 12512, National Bureau of Economic Research, Inc.
  8. Kemp, Murray C. & Wan, Henry Jr., 1976. "An elementary proposition concerning the formation of customs unions," Journal of International Economics, Elsevier, vol. 6(1), pages 95-97, February.
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