Has South Africa Liberalised Its Trade?

Abstract

This paper uses new tariff data to re-evaluate the extent to which South Africa has liberalised its trade from the late 1980s. The paper finds that significant progress has been made in simplifying South Africa's tariff structure and reducing tariff protection, but further progress can be made in removing tariff peaks, reducing tariff dispersion, and lowering the anti-export bias arising from protection. Further, although protection has fallen, the decline has been no faster than in other lower-middle-income economies. The paper also finds that estimates of the level of nominal and effective protection, and their rate of change, are sensitive to the choice of tariff measure (collection duties or scheduled tariff rates) and Input-Output or Supply-Use table, but that the sectoral structure of protection is largely unaffected.

Trade Policy in South Africa

“…The controversy stems from conflicting methodologies and data sources and the studies are not directly comparable (Edwards, 2005). The data indicate that there has been a considerable reduction in effective protection during the 1990s, but, as in the case of nominal protection, progress has slowed since 2000.…”

“…The question whether the simplification of the tariff structure shown in Table 2 is associated with substantial reductions in the level of protection in South Africa has received considerable attention (Fedderke and Vase, 2001;Rangasamy and Harmse, 2003;van Seventer, 2001;Cassim, 2003;Edwards, 2005). In this section we investigate the extent to which the shift in trade regime reduced nominal protection, effective protection and the anti-export bias, using sectoral level data.…”

“…Edwards (2005) constructs the detailed tariff schedules for South Africa from 1988 to 2004 using data published in the South African government gazettes. These data, updated to 2006 using data obtained from the South African Revenue Services, are used to calculate the import weighted average tariff rates by sector presented in Table 3.…”

“…These reforms led to a substantial simplification and rationalisation of the South African tariff structure 3 (Jenkins et al, 1997;Edwards, 2005). The number of tariff lines fell from over 12 000 at the 1 Acknowledgements: The authors are grateful for comments from Janine Aron and Brian Kahn.…”

Post-Apartheid South Africa: An Economic Success Story?

“…Since 2000, the pace of the process has, however, slowed down. A cascading tariff structure remains with significant gaps between the rates on consumer goods and capital and intermediate goods (Edwards 2005;Edwards and Lawrence 2006;Fedderke and Vaze 2001;Lewis 2002). Liberalization, however, has substantially reduced the effective protection (the protection provided to domestic value added relative to value added at international prices).…”