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The SADC region and EPA/EBAI - trade balance analysis

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  • Mphumuzi A. Sukati

Abstract

This paper investigates the potential trade balance outcomes of the economic partnership agreement (EPA)/everything but arms initiative (EBAI) policies in the Southern African Development Community (SADC) region using the Global Trade Analysis Project (GTAP) 7 model and database. The analysis of these policies therefore make conclusion on SADC member states changes in trade balance overall, per commodity groups and on overall welfare outcomes as a result of these policies. The study has found that although the EPA/EBAI policies potentially result in overall welfare gain in the SADC region this welfare gain will only be 6% of the European Union (EU) 27. Analysis of trade balance outcome reveals that the SADC African, Caribbean and Pacific (ACP) region will suffer a negative trade balance of US$1,596.8 million with the EU, on the other hand, having a positive trade balance of US$105.61 million. Since a positive trade balance is important for sustainable development of nations, these results once again throw into doubt the potential sustainable economic growth benefits of these policies to ACP countries.

Suggested Citation

  • Mphumuzi A. Sukati, 2012. "The SADC region and EPA/EBAI - trade balance analysis," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 4(2), pages 136-154.
    • Handle: RePEc:ids:ijsuse:v:4:y:2012:i:2:p:136-154
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    1. Alexander Keck & Roberta Piermartini, 2008. "The Impact of Economic Partnership Agreements in Countries of the Southern African Development Community," Journal of African Economies, Centre for the Study of African Economies, vol. 17(1), pages 85-130, January.
    2. J. S. L. McCombie & A. P. Thirlwall, 1994. "Economic Growth and the Balance-of-Payments Constraint," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-23121-8, March.
    3. Chris Milner & Oliver Morrissey & Andrew McKay, 2005. "Some Simple Analytics of the Trade and Welfare Effects of Economic Partnership Agreements," Journal of African Economies, Centre for the Study of African Economies, vol. 14(3), pages 327-358, September.
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    More about this item

    Keywords

    trade balance; welfare gains; EPA-EBAI policies; sustainable development; sustainable economic growth; sustainability; Southern African Development Community; SADC; economic partnership agreement; EPA; everything but arms initiative; EBAI; global trade analysis; sustainable economy.;
    All these keywords.

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology

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