South African Journal of Economic and Management Sciences
On-line version ISSN 2222-3436
JORDAAN, Andre and KANDA, Patrick. Analysing the trade effects of the EU-SA & SADC trading agreements: a panel data approach. S. Afr. j. econ. manag. sci. [online]. 2011, vol.14, n.2, pp. 229-244. ISSN 2222-3436.
This study investigates the trade effects of the EU-SA and SADC preferential trade agreements of which South Africa is a member. Using a panel data estimation of the gravity model of bilateral trade and based on data from 1994 to 2008, the study finds the EU-SA preferential trade agreement to have a significant trade expansion effect. The study further reveals that an informative conclusion on trade effects of the SADC preferential trade agreement can only be reached once the agreement has been fully operational. The study also recommends that trade policy in South Africa should increasingly be geared towards broad-based multilateral liberalisation. In addition, South Africa should promote regional economic stability and development through supporting regional trade agreement initiatives.
Keywords : trade creation; trade diversion; preferential trade agreement; panel data estimation; gravity model of bilateral.