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

Alejandro Nin-Pratt, Xinshen Diao () and Yonas Bahta
Authors registered in the RePEc Author Service: Alejandro Nin Pratt ()

No 888, IFPRI discussion papers from International Food Policy Research Institute (IFPRI)

Abstract: "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

Keywords: trade agreements; trade; development policies; Southern Africa; Sub-Saharan Africa (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-afr, nep-agr, nep-dev and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://hdl.handle.net/10568/161882

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Persistent link: https://EconPapers.repec.org/RePEc:fpr:ifprid:888

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