Evaluating the Trade, Revenue and Welfare Implication of Plantation Crops under ASEAN–India FTA

The African Continental Free Trade Area (AfCFTA) entered into force in May 2019 after surpassing the required 22 ratifications. This article combines the decision support model (DSM) and the Global Trade Analysis Project (GTAP) computable general equilibrium (CGE) model to make quantitative assessments of the expected welfare and trade effects of the AfCFTA on Nigerian and South African sectors possessing sustained export potential within the AfCFTA member states. By specifying two scenarios of AfCFTA membership, the simulation results reveal positive welfare gains for Nigeria (USD 146.12 million) and South Africa (USD 1.46 billion), originating from the GTAP sectors identified with sustainable export opportunities in the AfCFTA member states. The trade deal is also expected to be net-trade-creating, with a net trade of USD 2.15 billion at the global level. The assessments in this article are valuable in informing trade policy in light of core export competencies and the size, growth and consistency of the import demand in AfCFTA countries. It is also the first time elements of a product-level export market analytical tool are harmonised with a CGE model in the welfare and trade assessments of regional and/or bilateral trade arrangements. Policymakers and export promotion associations in both Nigeria and South Africa are recommended to utilise the results found in this article as a point of departure in leveraging the welfare-improving sustained export opportunities identified within the AfCFTA.

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“…CGE models [10,43,44] and partial equilibrium (PE) models [45][46][47] to assess the welfare and trade impacts of potential trade agreements.…”

Section: Empirical Understandingsmentioning

confidence: 99%

The Impact of AfCFTA on Welfare and Trade: Nigeria and South Africa in Light of Core Export Competences

Mhonyera

Meyer

2023

Sustainability

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“…The studies of Sikdar and Nag (2011) and Veeramani and Saini (2011) are based on pre-agreement data before 2009. Several studies are piecemeal, focusing on specific goods such as plantation commodities (Jagdambe & Mouzam, 2019) and fisheries (Ratna & Kallummal, 2013).…”

Section: Introductionmentioning

confidence: 99%

Evaluation of the Impact of Regional Trade Agreements on Indian Exports

Bharti

Nisa

2023

Journal of Asian Economic Integration

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This article scrutinises the repercussion of the regional trade agreements on Indian exports. The gravity model has been used for the analysis of two decades of panel data from 30 countries, spanning from 2001 to 2019. The gravity equation is estimated by the Ordinary Least Square (OLS) and Poisson pseudo-maximum likelihood (PPML) techniques using panel data regression. The PPML approach addresses the heteroskedasticity bias that is typically present in the OLS method. The study has revealed that the PPML results are more encouraging than those obtained based on the traditional approach (OLS). According to the empirical findings, India’s trading partners in South Asia benefit more from its economic integration than India does. However, the measurement of country-specific degrees of globalisation by the KOF globalisation index has a negligible effect on fostering trade across select nations. JEL Codes: C1, F1, F2, F6

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“…Although economic integration is beyond mere tariff reduction or elimination (Baier, et al, 2019), tariff and non-tariff measures are usually used to promote intra-trade among member countries (Perera, 2009). Proponents of FTA argue that it is a catalyst of accelerated economic growth (Awad, 2019) and an important instrument of poverty alleviation (Jagdambe & Mouzam, 2019). Most FTAs promote agriculture by expanding the market for agricultural produce.…”

Section: Introductionmentioning

confidence: 99%

“…Most FTAs promote agriculture by expanding the market for agricultural produce. This tends to increase agricultural production thereby helping to reduce the problem of food insecurity (Jagdambe & Mouzam, 2019). Besides, it enhances allocative efficiency as each member country concentrate on the products which they have comparative advantage (Awad, 2019).…”

Section: Introductionmentioning

confidence: 99%

“…Developing countries are embracing FTAs among themselves because they believe that it would help to resolve the challenges they face when trading with developed countries in terms of market access for agricultural trade, dumping, absence of reciprocal tariff concessions and so on (Jagdambe & Mouzam, 2019). Awad (2019) revealed that are 17 regional trade blocs currently in Africa with 8 of them recognised by the African Union.…”

Section: Introductionmentioning

confidence: 99%

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Impact of African Free Trade Policy (Agreement) on the Socio-Economic Development of Nigeria

Imoagwu

Ozoh

Madueke

et al. 2021

EJEFR

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The signing of the agreement that established the African Continental Free Trade Area (AfCFTA) in the year 2019 is believed to be an African-based growth strategy that is self-reliant and is expected to be the world’s largest free trade area after the World Trade Organization (WTO). The agreement is an attestation to the fact that African countries cannot continue to rely solely on the global trading system and global economy of the world economic powers, probably because they are increasingly becoming unpredictable. However, there is an assumption that the aggregate consumer and business spending on the continent could rise if AfCFTA is implemented successfully. This assumption therefore calls for a research like this to evaluate the likely economic impacts of the free trade agreement on different African countries particularly Nigeria which is the giant of Africa and the focus of this study. To achieve the objectives of the study, descriptive statistical approach was utilized to examine how the AfCFTA could contribute particularly on poverty reduction and Nigeria has been struggling for many decades to reduce poverty. These variables were considered: household income, illiteracy level, unemployment level and access to health care. The results of the analyses revealed that the AfCFTA could be slightly beneficial to Nigeria as it would improve the efficiency of the factors of production and product markets thereby enhancing household income generation, reducing the level of illiteracy, unemployment and increasing access to good health, efficient resource allocation and improved industry competitiveness which was expected to help Nigeria record significant reduction in poverty level and increase in economic development. In the light of these findings, the study recommends that government should then design proactive strategies that would reap the full benefits of AfCFTA such as engaging the private sector in identifying receptive and risk surrounding their sectors and paying more attention to the development of the service sector etc. The study has potential limitations such as unavailability of recent data. To tackle this limitation, the study adopted the 2019 survey data on pillars of measuring human development index by World Bank to address the quality of the findings, and research question. JEL: F10, H13, O10 Article visualizations:<img src="/-counters-/edu_01/0779/a.php" alt="Hit counter" />

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Evaluating the Trade, Revenue and Welfare Implication of Plantation Crops under ASEAN–India FTA

Cited by 6 publications

References 5 publications

The Impact of AfCFTA on Welfare and Trade: Nigeria and South Africa in Light of Core Export Competences

The Impact of AfCFTA on Welfare and Trade: Nigeria and South Africa in Light of Core Export Competences

Evaluation of the Impact of Regional Trade Agreements on Indian Exports

Impact of African Free Trade Policy (Agreement) on the Socio-Economic Development of Nigeria

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