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The Impact of Economic Partnership Agreements in Countries of the Southern African Development Community

The Impact of Economic Partnership Agreements in Countries of the Southern African Development... In the context of economic partnership agreements (EPAs) currently under negotiation between the European Union (EU) and African, Caribbean and Pacific (ACP) countries, trade is meant to be progressively liberalised in a reciprocal way as of 2008. EPAs are also intended to foster existing regional integration efforts among the ACP. This paper presents a computable general equilibrium model simulation of the impact of EPAs for countries of the Southern African Development Community (SADC). Different liberalisation scenarios are compared. We find that EPAs with the EU are welfare-enhancing for SADC overall, in particular if reductions in unemployment are considered. Results are robust to variations in key model parameters. For most countries, further gains arise from intra-SADC liberalisation. The possibility of the EU entering an free trade agreement with other countries, such as Mercosur, reduces estimated gains, but they still remain largely positive. Similarly, estimated gains need to be revised downwards if agriculture liberalisation is not as far reaching as a reduction of import barriers for manufactures. At the sectoral level, the largest expansion in SADC economies takes place in the animal agriculture and processed food sectors, while manufacturing becomes comparatively less attractive following EUSADC liberalisation. Results also show the need for the Southern African Customs Union tariff pooling formula to be adjusted to reflect new import patterns as tariffs are removed. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of African Economies Oxford University Press

The Impact of Economic Partnership Agreements in Countries of the Southern African Development Community

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References (9)

Publisher
Oxford University Press
Copyright
© Published by Oxford University Press.
Subject
Articles
ISSN
0963-8024
eISSN
1464-3723
DOI
10.1093/jae/ejm006
Publisher site
See Article on Publisher Site

Abstract

In the context of economic partnership agreements (EPAs) currently under negotiation between the European Union (EU) and African, Caribbean and Pacific (ACP) countries, trade is meant to be progressively liberalised in a reciprocal way as of 2008. EPAs are also intended to foster existing regional integration efforts among the ACP. This paper presents a computable general equilibrium model simulation of the impact of EPAs for countries of the Southern African Development Community (SADC). Different liberalisation scenarios are compared. We find that EPAs with the EU are welfare-enhancing for SADC overall, in particular if reductions in unemployment are considered. Results are robust to variations in key model parameters. For most countries, further gains arise from intra-SADC liberalisation. The possibility of the EU entering an free trade agreement with other countries, such as Mercosur, reduces estimated gains, but they still remain largely positive. Similarly, estimated gains need to be revised downwards if agriculture liberalisation is not as far reaching as a reduction of import barriers for manufactures. At the sectoral level, the largest expansion in SADC economies takes place in the animal agriculture and processed food sectors, while manufacturing becomes comparatively less attractive following EUSADC liberalisation. Results also show the need for the Southern African Customs Union tariff pooling formula to be adjusted to reflect new import patterns as tariffs are removed.

Journal

Journal of African Economies – Oxford University Press

Published: Jan 5, 2008

Keywords: JEL Classification F15 F17 O55 C68

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