The case for reciprocity in South African/European trade relations

Carolyn Jenkins and Willem Naudé

No 1995-13, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: South Africa and the EU are currently engaged in trade negotiations. The main options are to be inside Lome with exclusions, or outside with concessions, or to opt for a bilateral free trade treaty. This paper sets out the arguments in favour of a free trade treaty with Europe, namely that it would be welfare enhancing (especially if broadened into a customs union agreement and exemption from anti-dumping suits could be obtained); the Lome deal is of limited value: South Africa should not be excluded from the world trend towards bilateral and multilateral free trade accords; the credibility of sound domestic economic policies will be enhanced (which would attract foreign investment); and the benefits for the region may be positive over the longer run. Such an agreement would also be to the advantage of the EU and could become a model for European deals with other African countries on the expiry of Lome. To obtain a better rather than a worse type of FTA, South Africa should negotiate a negative list (if any); immunity against anti-dumping suits; provision for an eventual customs union; provisions for maintaining temporary protection for South African industries while the agreement is phased in; and the inclusion of SACU as a whole in the agreement.

Keywords: South Africa; Europe; Trade Relations; Policy Credibility (search for similar items in EconPapers)
JEL-codes: E61 F15 F21 O19 O52 O55 (search for similar items in EconPapers)
Date: 1995
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Published in Development Southern Africa, 13(1), February 1996, pp17-30

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