An Empirical Evaluation of Trade Potential in Southern African Development Community
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Date
2011-08
Authors
Simwaka, Kisukyabo
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
This paper attempts to estimate the trade potential expected from the Southern African
Development Community Free Trade Area (SADC FTA). Specifically, the study
investigates what the southern African countries stand to gain by way of increases in
intra-regional trade if all trade barriers are removed. In order to assess the trade potential compared to its current level, a gravity model has been estimated. Results show that the observed intra-regional trade is lower than its potential. The results suggest that there is trade potential in the sub-region. There is no question that an FTA will enhance the prospects for increasing intra-regional trade. The results are in agreement with Evans (1997), who found that the FTA is likely to lead to trade creation, and also the African Development Bank (1993) whose results found that there is considerable potential for the non-Southern African Customs Union (SACU) countries to switch supply from developing countries to South Africa. The results, however, differ with Chauvin and Gaullier (2002) and Cassim (2001) whose results indicated that SADC trade potentials are rather small, especially for South African exports. They also differ with Elbadawi (1997) whose results indicate that SADC did not have a significant effect on trade among its members.
Description
HC 865 .Z9 p836 2011
Keywords
Southern Africa Development Community - Commerce , Economic develpment - Africa Southern , Southern Africa development community