The welfare impact of a Free Trade Agreement: ‘Cape to Cairo’

ABSTRACT

The African market has become increasingly important to South Africa's agricultural trade. Exports have been increasing rapidly, although imports have not kept pace. This pattern is also evident in the general trade in manufactured goods. The purpose of this article is to look at the best estimate conditiuons that will prevail with respect to trade in agricultural and manufactured goods between South Africa (SACU) and the member countries of SADC, the East African Comminuity and COMESA. The analysis is conducted using the GTAP database and its associated general equilibrium model. The results show that South Africa benefits from integration in SADC and from the integration of the entire region, but not from integration with the EAC and COMESA. However, the latter steps are necessary to reap the benefits of integration in the entire region.

Keywords:

• Trade
• Africa
• regional integration

JEL Classification:

• C02
• C68
• F11
• F14

Additional information

Notes on contributors

H.G. Jensen

Research Fellow, Institute for Food and Resource Economics, University of Copenhagen, Rolighedsvej 25; DK-1958 Frederiksberg C

R. Sandrey

Senior Researcher, tralac and Professor Extraordinaire, Department of Agricultural Economics, University of Stellenbosch, Private Bag X1, Matieland, 7602

N. Vink

Professor, Department of Agricultural Economics, University of Stellenbosch, Private Bag X1, Matieland, 7602