Identifying regional trade potential between selected countries in the African tripartite free trade area

Ferreira, Lorainne; Steenkamp, Ermie

doi:10.4102/sajems.v23i1.2936

Cited by 5 publications

(11 citation statements)

References 16 publications

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“…In the context of the Regional Trade Agreements (RTAs), there have been extensive studies [41][42][43]. Since the independence of African countries, many RTAs have organized to accelerate the sustainable development of regional economic interactions.…”

Section: Literature Reviewmentioning

confidence: 99%

Trade Facilitation and Its Impacts on the Economic Welfare and Sustainable Development of the ECOWAS Region

Safaeimanesh

Jenkins

2020

Sustainability

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The facilitation of trade is a principal objective in the context of increasing regional trade integration for the achievement of sustainable development goals. The purpose of this study is to estimate the potential annual economic gain to be had from trade facilitation by the coastal countries of the Economic Community of West African States (ECOWAS). These measures would decrease border and documentary compliance time and costs of the administration of international trade. A partial equilibrium welfare economics framework is used that employs sets of export supply and import demand elasticities for each country that are derived using a general equilibrium estimation method. The annual economic welfare gains resulting from the reduction of excessive trade compliance costs for the region are estimated to between US$1.6 billion to US$2.7 billion (2019 prices). This is between 0.24% and 0.42% of the combined GDPs of these countries. The welfare gain is between 6% and 10% of the combined governments’ budgets assigned for education, and is between 33% and 58% of their budgets allocated for health. In the absence of reform, these inefficient practices waste an amount equal to between 15% and 26% of the annual net official development assistance these countries receive.

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Section: Literature Reviewmentioning

confidence: 99%

Trade Facilitation and Its Impacts on the Economic Welfare and Sustainable Development of the ECOWAS Region

Safaeimanesh

Jenkins

2020

Sustainability

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“…Importer-product-exporter data on matched, untapped trade opportunities between selected TFTA countries from Ferreira and Steenkamp (2020), were employed in this study to translate the potential trade values of these untapped trade opportunities into GTAP model shocks, a unique and somewhat unconventional approach in the implementation of this model. This was done to determine what the increase in trade efficiency (reduction in trade divisions) must be, in addition to the elimination of tariffs, to produce the estimated potential increase in trade for each importer-productexporter combination.…”

Section: Methodsmentioning

confidence: 99%

“…The success of increased regional trade requires action from both the demand and the supply sides. Ferreira and Steenkamp (2020) investigated trade opportunities in the Tripartite Free Trade Area (TFTA), which aims to enhance connectivity and production linkages between EAC (East African Community), https://www.jefjournal.org.za Open Access SADC (Southern African Development Community) and COMESA (Common Market for Eastern and Southern Africa) member countries. They found that nearly 70% of trade opportunities among TFTA countries are unrealised, showing that countries outside the region are supplying the import demand for products that could have been sourced from within the region.…”

Section: Introductionmentioning

confidence: 99%

“…However, the current study takes a much more targeted approach to promote intra-regional trade. It simulates the impact of realising untapped trade opportunities (exporter-product-importer combinations) among TFTA countries, as identified in Ferreira and Steenkamp (2020). Because the low levels of intra-African trade prove it difficult to translate policy into real increases in trade, these untapped intra-regional trade opportunities should be brought to the attention of importers, exporters, private sector organisations and policymakers as they represent 'low-hanging fruit' that, if effectively leveraged, could constitute the first practical steps towards addressing this problem.…”

Section: Introductionmentioning

confidence: 99%

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Targeting untapped intra-regional trade opportunities for trade integration in Africa

Ferreira

Steenkamp

Rossouw

2022

Journal of Economic and Financial Sciences

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Orientation: Although all African governments recognise the importance of stimulating greater intra-regional trade, the process of turning policy into action has proved to be difficult.Research purpose: Several studies have examined the broad effects of free trade areas in Africa and how the removal of tariffs and other trade barriers impacts member countries. However, no studies appear to have been conducted on the effects of a targeted reduction in trade divisions based on untapped export potential.Motivation for the study: Many divisions stifle trade on the African continent, from limited market access and poor infrastructure to unwieldy regulatory frameworks and a lack of information on trade opportunities that hinder greater intra-regional trade.Research approach/design and method: This study sets out to address the research gap by translating the potential trade values of the identified untapped intra-regional trade opportunities between African countries into (Global Trade Analysis Project) GTAP model shocks. This involved determining what the increase in trade efficiency (or reduction in trade divisions) must be, in addition to the removal of all tariffs, to deliver the estimated potential increase in trade for the identified trade opportunities.Main findings: The study found that in addition to the removal of tariffs, targeted increases in trade efficiency phased in over time produce much higher economic gains than a once-off trade efficiency shock.Practical/managerial implications: The welfare gains of many of the smaller African economies are higher under this phased approach, and it is not mostly the bigger, more industrialised economies that benefit most.Contribution/value-add: The results cast new light on the potential of African countries to leverage untapped trade opportunities to increase intra-regional trade among small and large economies alike.

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“…With a focus on SSA, Ferreira and Steenkamp (2020) identified an array of potential intra-regional trade opportunities that would occur, with improved integration of trading relationships across the 26 member countries in the Tripartite Free Trade Agreement (FTA). The authors concluded that the level of unnecessary costs, associated with international trade in the region, must be eliminated.…”

Section: Literature Reviewmentioning

confidence: 99%

Estimation of the potential economic welfare to be gained by the South African Customs Union from trade facilitation

Safaeimanesh¹,

Jenkins²

2021

South African Journal of Economic and Management Sciences

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Background: Trade facilitation is important for the South African Customs Union (SACU) countries because the expansion of international trade is a priority to enhance their economic growth. Unfortunately, the high trade compliance costs facing importers and exporters operating in SACU are in conflict with this objective.Aim: This article aims to quantify the annual economic welfare gains that the member countries of SACU could realise from reforms that would reduce the documentary and border compliance time and costs.Methods: We use a partial equilibrium welfare economics framework of up-to-date sets of general equilibrium estimates of the import demand and the export supply elasticity in a country. The impact on the volume of trade flow and economic welfare is quantified to reduce documentary and border compliance time and trade compliance costs.Results: The economic welfare changes from reducing the documentary and border compliance time and costs for imports and exports would be between US$2.2 billion and US$3.7 billion (2018 prices), or between 0.54% and 0.90% of GDP of the SACU countries. The economic welfare gains from reducing the excess administrative costs in imports and exports of SACU members would be between US$2.2 billion and US$3.7 billion (2018 prices), or between 0.54% and 0.90% of the GDP of the SACU.Conclusion: The most important reforms needed to realise these cost savings include a single window administrative structure. In this case, both customs, health, welfare, and controls, as well as the payment of all duties, taxes, and licenses are handled by a single administrative office. Failure to move fast regarding such changes would have a negative impact on the well-being of SACU members.

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Identifying regional trade potential between selected countries in the African tripartite free trade area

Cited by 5 publications

References 16 publications

Trade Facilitation and Its Impacts on the Economic Welfare and Sustainable Development of the ECOWAS Region

Trade Facilitation and Its Impacts on the Economic Welfare and Sustainable Development of the ECOWAS Region

Targeting untapped intra-regional trade opportunities for trade integration in Africa

Estimation of the potential economic welfare to be gained by the South African Customs Union from trade facilitation

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