What are the agricultural exports growth perspectives offered to sub-Saharan countries by current trade negotiations?

Mathilde Douillet

No 3116, EcoMod2011 from EcoMod

Abstract: Sub-Saharan African (SSA) countries are involved in negotiations for increased trade integration at the regional, bilateral and multilateral level. Previous simulations of liberalization fail to precisely compare the impacts of those different levels of increased liberalization on SSA because of inherent differences between the studies that make them hardly comparable, blurring sector and geographic disaggregation and lack of detailed tariff data. This study brings forward new comparable quantitative assessments of the impacts of different level of trade integration as well as their interaction on sub-Saharan African countries agricultural exports . Scenarios are based on legal negotiating proposals and counterfactuals take into account current trade and preferential agreements thanks to an updated version of the MAcMap database at the HS6 level. The potential static effects of tariff changes are simulated with the MIRAGE global computable general equilibrium model. Results on the level of tariff barriers faced by SSA agricultural exports and the consequent evolution of the structure of agricultural production and exports are analyzed at the most detailed level available for SSA in the GTAP7 database. Looking at welfare and GDP volume, developed countries benefit the most from DDA. SSA equally benefits from regional FTA than from DDA, which is a positive but small impact. A DFQF market access to OECD members and Emerging Economies highly reduces the number of losers from multilateral liberalization. Hence a combination of DFQF and DDA brings the highest gains both at the world level and for SSA. Nevertheless, the increased competition with DDA and DFQF is traduced by a drastic reorientation of the structure of production and exports of SSA towards raw agricultural products. On the contrary, regional integration fosters processed agricultural products regional production and trade. At the national level, SSA countries are heterogeneously affected by the different forms of trade integration depending on their initial preferential margins, the structure of their economy and their level of competitiveness. Despite the fact that many countries export similar products, the distributional impacts within the region are highly contrasted. The three main conclusions of this study are first that limiting the analysis of the results to regional GDP and welfare changes is highly deceptive, secondly that multilateral liberalization, and especially DFQF, would drive SSA countries further away from agricultural led industrialization and diversification of exports, and last that regional integration might be more in line with the stakes of sustainable development.

Keywords: Sub-Saharan African countries; Trade and regional integration; Developing countries (search for similar items in EconPapers)
Date: 2011-07-06
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Persistent link: https://EconPapers.repec.org/RePEc:ekd:002625:3116

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