The Impact of the COMESA-EAC-SADC Tripartite Free Trade Agreement on the South African Economy

Leone Walters, Heinrich Bohlmann () and Matthew Clance
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Leone Walters: Department of Economics, University of Pretoria, South Africa

No 201669, Working Papers from University of Pretoria, Department of Economics

Abstract: This paper analyses the e¤ects of the COMESA-EAC-SADC Tripartite Free Trade Agreement (TFTA) on the South African economy using a global Computable General Equilibrium (CGE) model. Simulation results show that South Africa’s economy gains from the implementation of the trade agreement with GDP rising by more than 1 per cent relative to the baseline. This win in overall economic activity occurs on the back of a term of trade increase and a surge in regional trade, which allows for higher levels of both exports and imports. The boost to exports stimulates local industries, whilst relatively cheaper imports lead to welfare gains for local consumers. Increased trade and industry activity causes higher demand for endowments, including skilled and unskilled labour, capital and land, pushing up wages and capital rentals.

Keywords: Computable General Equilibrium (CGE) Modelling; Free Trade Agreement; South Africa (search for similar items in EconPapers)
JEL-codes: C68 F13 O55 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2016-09
New Economics Papers: this item is included in nep-cmp and nep-int
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