Displaying items by tag: Trade Agreements

This study seeks to model the effects of trade on employment in South Africa in a Labour Demand framework. The study uses aggregated data, as opposed to a number of studies that have used either factor content or growth accounting approaches. The paper specifically seeks to determine the extent to which imports, exports, wages and output have impacted upon employment levels across the primary, secondary, and tertiary sectors. The analysis carried out in the study revealed that the derived labour demand in the primary sector and the secondary industries have been impacted negatively by increased imports. However, there was insufficient statistical evidence from the data to suggest that derived labour demand for any of the sectors was increased by increased exports openness.

Information on the impact of immigration on a host country's trade with particular reference to the African continent and the SADC region remains scant, if indeed it is ever available. This study seeks to fill this gap with an analysis of data. More specifically, the main objective of this study is to analyze the impact of cross-border movements of SADC citizens into South Africa on the latter country's trade (exports and imports) with SADC countries from which the migrants had originated. The estimated results of this study confirm the existence of a positive and statistically significant migration-trade relationship in the case of South Africa's trade with its SADC trading partners.

Member countries of the Southern Africa Development Community (SADC) engaged in a number of bilateral trade liberalisation agreements and initiatives from as way back as the 1950s, the main objective being to increase bilateral trade flows through deeper opening and access of regional markets. Southern African countries saw these ‘country to country' trade agreements coupled with the adoption, by the SADC region, of a ‘Protocol on Trade' (TP) in 1996, and its implementation from 2000, was viewed as a coherent trade policy strategy to promote regional economic growth and help reduce poverty. Bilateral trade flows have been analysed on sensitive products textiles and apparel, cereals and vehicles between SADC countries that have signed bilateral trade agreements between themselves and implemented the SADC TP which led to the adoption of a SADC Free Trade Area in 2008. Analysis focused on sensitive products because preferential bilateral trade agreements seem to be more generous (offer better concessions) on these products as compared to commitments member states undertook at the wider regional level under the SADC TP. Trade creation on wheat and sugar products dominates trade diversion even though the percentage increase in trade in these products is small. Moreover, there is no conclusive evidence that bilateral trade agreements increased bilateral trade flows beyond the market access opportunities provided by the SADC TP except only for textile products from Malawi into South Africa. SADC countries need to do more to implement commitments in their bilateral trade agreements to realise the real market access benefits of trade liberalisation. 

Empirical studies on regional economic integration process in Africa exhibit sluggish progress and there by limited level of intra trade. The existing literatures in Africa, particularly in Southern African regional integration bloc, SADC have neglected effects of regional economic integration dealing with disaggregated data. This study analyzes trade creation and diversion effects of the Southern African Development Community (SADC) using disaggregated data from 2000 to 2007.

The investigation estimates an augmented gravity model using panel data and random effect estimator methods. The results show that the intra -SADC trade is growing in fuel and minerals, and heavy manufacturing sectors while it displays a declining trend in agricultural and light manufacturing sectors. This implies that SADC has displaced trade with the rest of the world in both fuel and minerals, and heavy manufacturing sectors. SADC has served to boost trade significantly among its members rather than with the rest of the world. Countries participating in SADC have moved toward a lower degree of relative openness in these sectors trade with the rest of the world. However, the increasing trend of extra-SADC trade bias over the sample period in both agricultural commodities and light manufacturing sectors means that there has been a negative trade diversion effect. In other words, the value of trade between members and non-members has been increasing for the two sectors. These results seem to suggest that SADC countries retained their openness and outward orientation despite they signed the trade protocol for enhancing intra-SADC trade in agricultural and light manufacturing sectors.

The heads of states of the Common Markets for East and Southern Africa (COMESA), the East Africa Community (EAC) and the Southern African Development Community (SADC) met in Uganda in October 2008 to discuss broader objectives of the three regional trading blocs. This was later referred to as the Tripartite Summit. Discussions centred on achieving acceleration of economic integration on the continent in line with the Abuja Treaty and on the African Union objective of the formation of one continental economic bloc. The key issues for the three blocs were regional trade liberalisation, infrastructure development and a legal and institutional framework. The leaders agreed to initiate a process of coordination and harmonisation of programmes in order to progress towards the goals of expanding trade, alleviating poverty and attaining the overall development objective. The Summit provided a platform for the three blocs to join forces in forming a larger Free Trade Area (FTA).

Trade-in-services is fast becoming one of the foremost areas of research and policy making in the international trade arena. Although the General Agreement on Trade-in-Services (GATS) was implemented in 1995, it is only recently, with the realisation of the close linkages between goods and service exports and the advent of better data, that researchers have begun to pay more serious attention to questions such as 'comparative advantage' and 'trade liberalisation' in the service trade. While research on the subject has lagged, negotiations and policy analysis (because of GATS) has had to make do with what little is understood about the service sector. One reason for the lack of clear stylised facts about service exports is the diverse nature of the industries that comprise it. The World Trade Organization (WTO) defines twelve service industries, each with specific characteristics, measurement issues and economic incidence. Furthermore, each service industry consists of four modes of trade. In addition, trade involves both imports and exports. South Africa has a long history of travel service exports. The first Europeans settled in the Cape to provide services to passing ships on their voyages to the East Indies and back to Europe. Cape Town, known as the 'Tavern of the Seas', offered sailors and soldiers accommodation, entertainment and health care before commencing the second leg of their journey. Today, South Africa offers the international traveller a diverse travel experience. Blessed with unique natural landscapes, fauna and flora, history and cultures, together with a built environment offering quality services, travel exports are one of the fastest growing sectors in the South African economy. Given this, South Africa seems to enjoy a comparative advantage: Travel service exports comprise more than 65% of the country's total service trade, significantly higher than the world average of 38%. This paper defines travel service exports and reflects on its development in South Africa. Using a new United Nations Conference on Trade and Development (UNCTAD) dataset, tests the hypothesis that South Africa has a comparative advantage in exporting travel services. The relative advantage of this sector is also compared against that of other countries. The evidence supports the notion that South Africa has a revealed comparative advantage in exporting travel services.

As tariff barriers are reduced around the world, increasing attention has been paid to non-tariff measures. Although differing definitions exist of exactly what these NTMs are, let alone how their quantitative impacts are measured, they can basically be defined as government measures other than tariffs that restrict trade flows.

This paper evaluates bilateral trade between South Africa and the EU over the past decade, where possible up to 2003.

Structure of the Report:

Part A: Aspects of trade and tariff patterns

• Basic trade flows between South Africa and the EU
• Intra-industry trade
• Trade intensity calculations
• Areas of export potential for South Africa to evaluate a possible South African export growth strategy
• Revealed trade barriers
• Possible effects of existing tariffs on bilateral trade flows

Part B:  A preliminary quantitative assessment of the impact of the FTA on South
Africa's trade with the EU

• To what degree has the phase down of EU tariffs had a positive impact on South African exports to the EU?

This paper evaluates bilateral trade between South Africa and the EU over the past decade, where possible up to 2003.

Structure of the Report:

Part A: Aspects of trade and tariff patterns

Basic trade flows between South Africa and the EU.
Intra-industry trade
Trade intensity calculations
Areas of export potential for South Africa to evaluate a possible South African export growth strategy
Revealed trade barriers
Possible effects of existing tariffs on bilateral trade flows

Part B: A preliminary quantitative assessment of the impact of the FTA on South

Africas trade with the EU

To what degree has the phase down of EU tariffs had a positive impact on South African exports to the EU?

This paper by Prof. Merle Holden, head of the School of Economics and Management at the University of KwaZulu-Natal Durban and Landon McMillan, an economist at TIPS, supports the view that the EU-SA FTA stimulated both imports and exports, while for SADC, exports were stimulated but the results for imports were ambiguous. The AGOA results were far less significant overall, suggesting that preferential access for South African exports into the US had not been particularly beneficial.

Description
In his paper, Albert Berry - professor of economics and director of the Latin American programme at the Centre for International Studies of the University of Toronto - identifies the impacts of globalisation and liberalisation on inequality. He finds that data deficiencies and a lack of in-depth analysis of inequality, poverty and their determinants - especially in developing countries - have delayed a better understanding of how these important indicators of social and economic well-being have been changing over time, and how they have been affected by globalisation and liberalisation.

Since the mid-1990s, South Africa has made considerable progress in opening ups its trade regime. In 1994 South Africa committed itself to reducing and simplifying its tariff levels and structure in accordance with it offer under the GATT Uruguay Round. As a consequence tariffs have fallen, although the number of tariff rates and types remains high. Some estimates suggest that average tariffs in manufacturing have fallen from close to 30% in 1990 to around 10% in 2002. However, the extent of the decline is highly dependent on the calculation of ad valorem equivalents for non-ad valorem tariffs (specific, mixed, compound and formula duties) and the choice of tariff measure (scheduled tariff or collection duties). The difficulty in measuring protection is reflected in the continuing debate on the extent to which the economy has liberalised its trade (Fedderke and Vase, 2001; Rangasamy and Harmse, 2003).

This study advances existing empirical work in a number of ways. Firstly, we use detailed sector level tariff data as one of our indicators of changes in openness. We calculate tariff levels for 26 manufacturing sectors between 1988 and 2002 using both scheduled tariff rates and collection duties. We thus test the robustness of the relationship between tariff liberalisation and mark-ups to different measures of tariff protection.

This paper evaluates how tariff liberalisation affected households in South Africa over the period 1995, 2000 and 2004, focussing specifically on the incidence of tariffs over the expenditure distribution. Results suggest that trade liberalisation has reduced the tariff burden for households across the expenditure distribution, implying significant welfare improvement to consumers in the form of reduced prices. However, the gains from liberalisation and the continued burden of continued protection are not uniform across household and wealth categories. Poor households continue to bear a disproportionate share of the tariff burden indicating the regressive nature of import tariffs. Wealthy households also gained relative to all but the very poor between 1995 and 2000. Between 2000 and 2004, this trend was reversed, and the poor gained relatively more than the wealthy. Our results indicate potentially large pro-poor gains to consumers from further liberalisation, but the realisation of these gains is dependent on the pass-through of tariff reductions to consumers.

The South African government is evaluating the economy’s performance over its first decade in power. This period can be characterised by a ‘double’ liberalisation: democratisation of the political process going hand in hand with liberalisation of the economy. This paper provides a broad overview of the macroeconomic aspects of this liberalisation.

Economic liberalisation might be expected to change the working of the macroeconomy: as the economy opens up, the foreign sector should begin to play more of a role in aggregate demand. Also, the lifting of constraints may disturb the established savings-investment process as new economic conditions face savers and investors. From this perspective, one of the questions that comes to mind when examining the macroeconomic policies, trends and events in the last ten years of the South African economy, is whether or not there have been significant changes during the liberalisation period in demand side parameters such as import coefficients and savings rates along with jumps in flows such as annual exports, investment, etc. Following methodologies presented in Berg & Taylor (2001) and Davies & Rattsø (2001), it is perhaps interesting to look at how output has responded to these shifts, using a simple three gap analysis and decomposition of aggregate demand "injections" (investment, government spending, exports) versus "leakages" (saving, taxes, imports). The key point is that in macroeconomic equilibrium, totals of injections must be equal to the total of leakages.

In South Africa, there is an increasing trend towards trading health services, both in the public and in the private health sectors, despite minimal formal liberalisation offered by South Africa under the General Agreement on Trade in Services (GATS). Health services trade has been occurring in at least three of the four modes of supply: foreign commercial presence, consumption abroad and movement of natural persons. This paper concentrates on defining regulations in the health sector and determining whether these form barriers to trade or are trade enabling. The paper also provides data on the sector under the categories of human resources, health care providers and health care purchasers. It is concluded that policymakers would be wise to exercise due caution when considering health services trade liberalisation as the impact on the public sector may not be positive.

As international tariffs are being reduced increased attention is being given to the role of non-tariff measures in impeding trade flows. The working definition of NTMs used in this report is 'government measures other than tariffs that restrict trade flows'. This covers a range of measures from health and safety measures through to the suite of regulations associated with trade and general matters such as transport costs and customs and administration procedures that may not be not directly under the control of governments but certainly under its influence.

This study examines NTMs facing exporters from the South and Southern African region in their major markets. It does not examine NTMs within the region itself. Data is from a wide range of secondary sources.

Exports are divided into three main categories. In the first, there are few NTM inhibiting the mining and metal sector. Coal may be the only exception to this, as it is heavily subsidised in parts of the EU.

Three of the main manufacturing exports from Southern Africa are automobiles, clothing, and iron and steel products. All three face distorted markets internationally. Currently the textile and clothing sector is actually benefiting through preferential access into the EU and US markets. However, when the international quotas are removed at the end of 2004 and if tariffs are reduced by either bilateral or multilateral liberalisation these preferences may be dissipated; thus threatening the sector in Southern Africa with increased competition unless productivity improvements can be made. Iron and steel exports from the region, were, at the time of writing, also benefiting from the US safeguard actions, as these exports were exempted from the safeguard actions and consequently received higher prices through the effects of less global competition in the US market.

Internationally, agriculture is a very distorted sector as the OECD countries continue to heavily support their producers. This would suggest that NTMs are a problem, and that is indeed the case. Balancing this is the preferential access that the region has for some agricultural products into the EU in particular. Sugar is the main example, as Mauritius and others gain considerable economic rents into the EU market. SPS issues are a concern for many products into the developed country markets, as it is difficult and costly for the smaller developing countries in the region to meet these exacting standards. Other NTMs include tariff quotas on fruit exports.

Many NTMs may exist for legitimate reasons such as consumer protection or as a component of the business methods necessary for doing trade. These measures only become genuine NTMs when they are implemented in such a manner as to unnecessarily add to costs or inhibit trade. In the multilateral context the WTO is international disputes arbitrator on many NTMs, although very few NTM's have been taken to dispute settlement. Bilateral FTA negotiations also present opportunities to alleviate these problems as well as reduce tariffs, and these opportunities must be taken. The paper discusses these aspects in more detail.

There is enough information and analysis in this paper to affirm that NTMs are an issue for exporters from the region. The suggested way forward includes addressing the NTMs as discussed in the previous paragraph and also building upon this current study to obtain more detailed information on the problems. The best method of doing this is by seeking primary data from exporters and business people. At a minimum this would entail a series of face-to-face interviews with these key actors, but perhaps a wider (e)mail survey could be considered to canvass a more definitive information base.

Quantification of the costs to the region of NTMs is needed. However, firstly it is necessary to get a more in-depth understanding of the problems, and secondly international quantification methodologies can be best described as being in their formative stages.

In this short report we examine South African trade with Brazil for decade up to 2001. First we look at the absolute values, trends, patterns at the aggregate level and somehow disaggregated level of 22 commodities clusters. The aim of this section is to provide a first round analysis of those commodities that feature prominently in trade flows between South Africa and Brazil. It provides a descriptive analysis of trade between two countries, this includes imports and total trade defined as the sum of imports and exports) of merchandise, and a measure of changes in trade patterns. In the last two tables of this note we will look into the finer details of the trade flows at the HS4 level. Our analysis takes a gradual approach from the aggregated to the more detailed level and it is based on the annual data from Customs and Exercise at current

South Africa has experienced significant liberalisation during the 1990s on the political as well as economic front. Starting with the first democratic elections in 1994, the economy has undergone liberalisation of internal and external financial markets, labour markets and trade regime. Major changes have also taken place in terms of monetary and fiscal policy, where discipline and sustainability have become the guiding principles, while industrial policy saw a shift from demand-side to supply-side measures. Whether these policy choices have resulted in higher levels of efficiency and more importantly better economic performance and equity will remain the subject of economic research for years to come, notably because the structure of any economy does not change overnight. While some of the liberalisation efforts started before the 1990s, a number of them took place during the middle of the decade. Although perhaps still somewhat premature, an examination of the South African economy during both halves of the decade is perhaps a worthwhile exercise.

The Cancun Ministerial Conference ended on 14 September after Chairperson Luis Ernesto Derbez concluded that members remained entrenched on the "Singapore" issues. Shortly before 18:00 Cancun time, Mexican Trade Minister Luis Ernesto Derbez formally closed the Fifth Session of the WTO Ministerial Conference, without agreement on a Ministerial Text.

The meeting had collapsed in mid-afternoon over ongoing deep divisions among Members, particularly over whether and how to launch negotiations on the 'Singapore' issues of investment, competition, transparency in government procurement and trade facilitation.

Minister Luis Ernesto Derbez proposed a six-paragraph ministerial statement, which was approved in the closing session at almost 6:00 pm. The paragraph instructs member governments' officials "to continue working on outstanding issues with a renewed sense of urgency and purpose and taking fully into account all the views we have expressed in this Conference."

The ministers asked the General Council Chairman and the WTO Director-General, to coordinate the work and to convene a meeting of the General Council at senior officials level no later than 15 December 2003 to take necessary action.

Cancun Ministerial Text

1. As we conclude our Fifth Ministerial Conference in Cancun we would like to express our deep appreciation to the Government and people of Mexico for the excellent organization and warm hospitality we have received in Cancun.

2. At this meeting we have welcomed Cambodia and Nepal as the first least-developed countries to accede to the WTO since its establishment.

3. All participants have worked hard and constructively to make progress as required under the Doha mandates. We have, indeed, made considerable progress. However, more work needs to be done in some key areas to enable us to proceed towards the conclusion of the negotiations in fulfilment of the commitments we took at Doha.

4. We therefore instruct our officials to continue working on outstanding issues with a renewed sense of urgency and purpose and taking fully into account all the views we have expressed in this Conference. We ask the Chairman of the General Council, working in close co-operation with the Director-General, to coordinate this work and to convene a meeting of the General Council at Senior Officials level no later than 15 December 2003 to take the action necessary at that stage to enable us to move towards a successful and timely conclusion of the negotiations. We shall continue to exercise close personal supervision of this process.

5. We will bring with us into this new phase all the valuable work that has been done at this Conference. In those areas where we have reached a high level of convergence on texts, we undertake to maintain this convergence while working for an acceptable overall outcome.

6. Notwithstanding this setback, we reaffirm all our Doha Declarations and Decisions and recommit ourselves to working to implement them fully and faithfully.