Examining South Africa’s trade with the Southern African Development Community (SADC) with the SADC Free Trade Area initiative in place

Part of : MIBES Transactions : international journal ; Vol.7, pages 63-78

Issue:
Pages:
63-78
Author:
Abstract:
This paper examines South Africa’s trade with SADC given that the SADC FTA is now in place. Trade intensity indexes were calculated and evidence shows that while South Africa trades intensively with other regional groupings in Africa, non-SACU SADC is its most important trading partner. Significant increases in South Africa’s imports from non-SACU SADC coincided with the years it zero rated its products in various product categories. In examining the factor intensities of products traded, evidence shows that South Africa’s major imports from non-SACU SADC are mainly mineral fuels, non-primary commodities, and resource-intensive manufactures, while its major exports to non-SACU SADC are mainly technology-intensive manufactures. This reflects disparities in levels of industrial development between South Africa and non-SACU SADC. In examining whether other regional groupings in Africa have been able to displace non-SACU SADC as South Africa’s major trading partner, evidence shows that while the groupings have made efforts to gain some ground over non-SACU SADC, these efforts have not been sustained, with South Africa trading mostly with non-SACU SADC.
Subject:
Subject (LC):
Keywords:
trade intensity index, factor intensity of products, Southern African Development Community, Southern Africa Customs Union, East African Community, Economic Community for West African States
References (1):
  1. Asonuma, T. Debrun, X. & Masson, P.R. (2012), “Welfare Effects of Monetary Integration: the Common Monetary Area and Beyond”, IMF Working Paper, WP/12/136 Aziakpono, M. Kleimeier, S. & Sander, H. (2007), “Banking Market Integration in the SADC Countries: Evidence from Interest Rate Analyses”, Working Paper. [Online] Available: http://edocs.ub.unimaas.nl/loader/file.asp?id=1284 Buigut, S.K. & Valev, N.T. (2006), “Eastern and Southern Africa Monetary Integration: A Structural Vector Auto regression Analysis”, Review of Development Economics, 10(4), 586-603 Drysdale, P. & Garnaut, R. (1982), Trade intensities and the analysis of bilateral trade flows in a many-country world: A survey, [Online] Available http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/7939/26/HJeco0220200620.pdf Edmonds, C. & Li, Y. (2010), A new perspective on China trade growth: Application of a new index of bilateral trade intensity, [Online] Available: http://www.economics.hawaii.edu/research/workingpapers/WP_10-25.pdf Foroutan, F. (1998), “Does membership in a regional preferential trade arrangement make a country more or less protectionist”? World Economy, 21(3), 305-335 Gilbert, J. (2010), “Understanding and using common indices of international trade”, Presentation at the ESCAP Training Session, Ulaanbaatar, 24-25 June, [Online] Available: http://www.unescap.org/tid/projects Jefferis, K.R. (2007), “The Process of Monetary Integration in the SADC Region”, Journal of Southern African Studies, 33(1), 83-106 Johns, M.R. (2009), Macroeconomic Convergence within the SADC: Implications for the Formation of a Regional Monetary Union, Unpublished MA Thesis submitted to the Department of Economics and Economic History, Rhodes University Khamfula, Y. & Huizinga, H. (2004), “The Southern African Development Community: Suitable for a Monetary Union?”, Journal of Development Economics, 73, 699-714 Nindi, A.G. (2012), The feasibility of monetary integration within the SADC region, Unpublished Thesis submitted in fulfillment of the requirements for the Degree of PhD, Submitted to Department of Economics & Economic History, Rhodes University Southern African Customs Union, (2006), The tariff phase down offer by SACU to SADC, [Online] Available http://www.sadc.int Accessed 22/02/2006 Weldemicael, E.O. (2010), Bilateral trade intensity analysis. [Online] Available: http://www.economics.unimelb.edu.au/seminars/app/UploadedDocs/Doc59.pdf