EU-Rep. of South Africa FTA: extensions to baseline

1
EU-Rep. of South Africa FTA extensions to
baseline

• GTAP Short Course
• Purdue University
• 4 August 2006

2
Motivation for baseline

• Important question in trade policy discussions
• How significant are the unintended impacts of
  PTAs on third parties, especially when that third
  party has a PTA with one of the parties entering
  the new agreement?

3
Baseline scenario schematic
EU
South Africa
Internal free trade, CET, tariff sharing
Namibia Lesotho Swaziland
Bilateral liberalization (0-100)
Botswana
Import Quota on Meat
4
Baseline key results
5
Extensions to baseline

• Rainer and John - The Botswana meat story
  quotas, tariffs and all that jazz
• Jonathan and David Including Botswana in the
  EU-SACU FTA
• Birgit and Idrissa - Partial liberalization of
  dairy and sugar in the EU
• Mitsu and Amal - Impact of productivity
  improvements in Botswanas ag sector

6
The BWA Meat Story
EU
South Africa
Lesotho Namibia Swaziland
Internal free trade, CET, tariff sharing
Botswana BWA
liberalization (0-100)
Import Quota on Meat
7
The BWA Meat Story
EU
South Africa
Lesotho Namibia Swaziland
Internal free trade, CET, tariff sharing
???
Botswana BWA
liberalization (0-100)
Should BWA be concerned about the meat quota
agreement with EU ?
Remove Quota on Meat
8
Removing quota constraint on meat for BWA

• Closure file changes
• ! ORG
• ! Fix Qty and price of BWA exports of meats to
  EU
• swap qxs("meat","bwa","eur") rxs("meat","bwa","e
  ur")
• ! Remove restriction
• ! swap qxs("meat","bwa","eur")
  rxs("meat","bwa","eur")
• Expansion on exports 7
• Why didnt BWA exports of meat to EU go up more
  strongly ?

9
Why didnt BWA exports of meat to EU go up more
strongly ?

• No competitive price in BWA compared to other
  regions
• Trade is still constrained by (high) EU tariffs
• Limited capacity to expand the meat processing
  sector
• Tariffs (meat to EU) 87 (BWA), 80 (SA-region)
• ! Full Liberalisation on MEAT BWA to EU (using
  target rate)
• Shock tms("meat","bwa","eur") -46.4629

10
Results Exports
11
Results Welfare