Regionalism, Trade and Growth: The Case of the Eu-South Africa Free Trade Arrangement
USITC Working Paper No. 2001-07-A
18 Pages Posted: 29 Jul 2001
Date Written: July 2001
In a sequential Computable General Equilibrium analysis, we investigate the likely effects of the EU-South Africa Free Trade agreement (FTA), with a special emphasis on South Africa's growth prospects. We find that the FTA increases South African output and welfare. We note, however, that the gains are very modest when viewed in the context of the time period over which full adjustment to the treaty provisions is expected to occur. Only 2 percent of the economic growth expected over the next 18 years in South Africa can be linked to additional trade associated with the FTA. The long phase-in period and the partial benefits of regionalism limit the importance of trade as an engine of growth.
Keywords: Regionalism, Growth, Free Trade Area, South Africa, European Union
JEL Classification: F15, F17, F43
Suggested Citation: Suggested Citation