IDEAS home Printed from https://ideas.repec.org/p/jrp/jrpwrp/2013-036.html
   My bibliography  Save this paper

Cumulative Benefits from Trade Liberalization for the South African Economy

Author

Listed:
  • Matthias Bauer

    (Friedrich Schiller University Jena)

  • Andreas Freytag

    () (Friedrich-Schiller-University Jena and University of Stellenbosch)

Abstract

South Africa's trade barriers are still relatively high compared to other emerging market economies, and its industrial policy still preferentially treats certain industries. Based on a static GTAP model, we estimate the economic impact of further trade liberalization on the South African economy. We particularly take into account core NTB's on tradable commodities and the costs imposed by cross-border trade facilitation, which is particularly inefficient in South Africa. Our results indicate that a full liberalization package, including a reduction of core NTB's as well as a substantial increase in the efficiency of cross-border trade facilitation to the levels of Singapore, would cause the South African GDP to rise by up to 4.51 per cent. This implies an increase in aggregate welfare of up to 21 billion US Dollars. This sum is the equivalent of what should be given to the South African economy in order to leave citizens as well of as after the implementation of a full liberalization package, given South African policy-makers abstain from further trade liberalization policies.

Suggested Citation

  • Matthias Bauer & Andreas Freytag, 2013. "Cumulative Benefits from Trade Liberalization for the South African Economy," Jena Economic Research Papers 2013-036, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2013-036
    as

    Download full text from publisher

    File URL: http://pubdb.wiwi.uni-jena.de/pdf/wp_2013_036.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Hiau LooiKee & Alessandro Nicita & Marcelo Olarreaga, 2009. "Estimating Trade Restrictiveness Indices," Economic Journal, Royal Economic Society, vol. 119(534), pages 172-199, January.
    2. repec:wsi:wschap:9789812701350_0019 is not listed on IDEAS
    3. Jean Fouré & Agnès Bénassy-Quéré & Lionel Fontagné, 2012. "The Great Shift: Macroeconomic projections for the world economy at the 2050 horizon," Working Papers 2012-03, CEPII research center.
    4. Philip D. Adams & J. Mark Horridge, 2004. "The Effects of a Free Trade Agreement Between the USA and the South African Customs Union (SACU)," Centre of Policy Studies/IMPACT Centre Working Papers g-147, Victoria University, Centre of Policy Studies/IMPACT Centre.
    5. John C. Beghin, 2006. "Nontariff Barriers," Food and Agricultural Policy Research Institute (FAPRI) Publications 06-wp438, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
    6. Simeon Djankov & Caroline Freund & Cong S. Pham, 2010. "Trading on Time," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 166-173, February.
    7. Shandre Mugan Thangavelu & Gulasekaran Rajaguru, 2004. "Is there an export or import-led productivity growth in rapidly developing Asian countries? a multivariate VAR analysis," Applied Economics, Taylor & Francis Journals, vol. 36(10), pages 1083-1093.
    8. Soamiely Andriamananjara & Michael Ferrantino & Marinos Tsigas, 2005. "Alternative Approaches In Estimating The Economic Effects Of Non-Tariff Measures: Results From Newly Quantified Measures," World Scientific Book Chapters,in: Quantitative Methods For Assessing The Effects Of Non-Tariff Measures And Trade Facilitation, chapter 19, pages 525-540 World Scientific Publishing Co. Pte. Ltd..
    9. Brander, James A., 1995. "Strategic trade policy," Handbook of International Economics,in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 27, pages 1395-1455 Elsevier.
    10. Fredebeul-Krein, Markus & Freytag, Andreas, 1997. "Telecommunications and WTO discipline. An assessment of the WTO agreement on telecommunication services," Telecommunications Policy, Elsevier, vol. 21(6), pages 477-491, July.
    11. Fugazza, Marco & Maur, Jean-Christophe, 2008. "Non-tariff barriers in CGE models: How useful for policy?," Journal of Policy Modeling, Elsevier, vol. 30(3), pages 475-490.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    South Africa; trade policy; international trade; non-tariff trade barriers; GTAP;

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • K2 - Law and Economics - - Regulation and Business Law
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • F1 - International Economics - - Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:jrp:jrpwrp:2013-036. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Markus Pasche). General contact details of provider: http://www.jenecon.de .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.