Transcript EU-South Africa FTA: extensions to baseline

EU-Rep. of South Africa FTA:
extensions to baseline
GTAP Short Course
Purdue University
4 August 2006
Motivation for baseline
• Important question in trade policy
discussions:
How significant are the ‘unintended’
impacts of PTAs on third parties,
especially when that third party has a PTA
with one of the parties entering the new
agreement?
Baseline scenario: schematic
EU
South Africa
Internal
free trade,
CET, tariff
sharing
Bilateral liberalization
(0-100%)
Import Quota on Meat
Botswana
Namibia
Lesotho
Swaziland
Baseline: key results
1.00%
% change in real GDP
1.0
0.8
0.50%
0.6
sad
xaf
eur
naf
mer
xeu
xam
xwo
0.75%
0.25%
0.00%
0.4
-0.75%
-0.2
-0.4
bwa
0.0
bwa
-0.50%
sad
xaf
eur
naf
mer
xeu
xam
xwo
0.2
-0.25%
-1.00%
xsc
xsc
EV as % of GDP
Extensions to baseline
1. Rainer and John - The Botswana meat story:
quotas, tariffs and all that jazz
2. Jonathan and David – Including Botswana in
the EU-SACU FTA
3. Birgit and Idrissa - Partial liberalization of dairy
and sugar in the EU
4. Mitsu and Amal - Impact of productivity
improvements in Botswana’s ag sector
The BWA Meat Story
EU
South Africa
Lesotho
Internal
free trade,
CET, tariff
sharing
Botswana
liberalization (0-100%)
Import Quota on Meat
BWA
Namibia
Swaziland
The BWA Meat Story
EU
South Africa
Lesotho
Internal
free trade,
CET, tariff
sharing
???
Namibia
Swaziland
Botswana
liberalization (0-100%)
Remove Quota on Meat
BWA
Should BWA be concerned
about the meat quota
agreement with EU ?
Removing quota constraint on meat
for BWA
• Closure file changes
• ! ORG;
• ! Fix Qty and price of BWA exports of meats to EU;
• swap qxs("meat","bwa","eur") = rxs("meat","bwa","eur");
• ! Remove restriction;
• ! swap qxs("meat","bwa","eur") = rxs("meat","bwa","eur");
• Expansion on exports: + 7%
• Why didn’t BWA exports of meat to EU go up more strongly ?
Why didn’t BWA exports of meat to
EU go up more strongly ?
1. No competitive price in BWA compared to other
regions
2. Trade is still constrained by (high) EU tariffs
3. Limited capacity to expand the meat processing
sector
•
Tariffs (meat to EU) : 87% (BWA), 80% (SA-region)
•
! Full Liberalisation on MEAT BWA to EU; (using
target rate);
Shock tms("meat","bwa","eur") = -46.4629;
•
Results : Exports
Competitiveness (meat)
% Change Exports (meat, all
regions) ! Shock -> 0
% Change in Exports
450
BWA
SARegion
700
400
600
350
500
300
250
AVRGE
SARegion
400
200
300
150
200
100
50
EU
100
0
0
-50
BWA
Results : Welfare
1.50%
SA-Region
1.00%
BWA
0.50%
ROW
0.00%
Def.: EV / GDP in %