Assessing the impacts of SADC Free Trade Agreements (SADC FTA) on South African agricultural trade
| dc.contributor.advisor | Bahta, Yonas | |
| dc.contributor.advisor | Ogundeji, A. A. | |
| dc.contributor.author | Fadeyi, Oluwatoba Akinsuyi | |
| dc.date.accessioned | 2015-08-12T09:48:10Z | |
| dc.date.available | 2015-08-12T09:48:10Z | |
| dc.date.issued | 2013-01 | |
| dc.description.abstract | English: In today’s economically integrated world, trade matters more than ever before. Nations are signing various bilateral trade agreements and are engaged in various form of economic integration. Developing countries are also involved in economic integration for vital developments. Free trade areas (FTA), which is a form of economic integration, is formed by removing tariffs on trade among member nations leaving the autonomy in setting their tariffs on trade with non-members. The Southern Africa Development Community (SADC) became a Free Trade Area in 2008 for the economic integration of members. Literature reviews revealed that econometric models (gravity model in particular) have not been extensively used to estimate the impact of free trade agreements on South African agricultural trade at commodity level using disaggregated data. This study, therefore, evaluates the impact of Southern Africa Development Community Free Trade Agreements (SADCFTA) on South African agricultural trade using gravity model. The study focuses on South African data for agricultural exports and imports with SADC member countries and EU-15 countries for meat of bovine, maize and wheat commodities from 2000 to 2011. These products were selected based on their sensitivity, relative importance in terms of their contributions to the gross value of agricultural production, consumption and their tradability. The study used the gravity modeling technique to analyse the impact of SADC free trade agreement. The applied regression method used is the Poisson Pseudo Maximum Likelihood (PPML) estimator to determine the significance of variables within the model. The PPML was preferred to the ordinary least square (OLS) method of estimation. In the presence of heteroskedasticity the standard OLS methods can severely bias the estimated coefficients, casting doubt on the empirical findings. The PPML is robust to different patterns of heteroskedasticity and provides a natural way to deal with zero values in data. The result shows that there has been a significant increase in trade for meat of bovine and maize among SADC members. There has been a net trade creation and an increasing intra-SADC bloc bias for meat of bovine. The intra-regional trade in maize has also been stimulated by the implementation of the free trade agreements. The study cannot identify any strong bloc effect in wheat trade. Therefore a trade diversion effect was established. The empirical findings of this study can be considered as an intermediate step to address the relative trade creation and trade diversion effects. The study also signifies the importance of analyzing the effects of SADCFTA for major agricultural commodities. In order to assess the progress of the SADCFTA scheduled of full liberalization up till the end of 2012, it is imperative that the study recommends carrying out further studies to assess the full liberalization of trade in the agricultural sector. | en_ZA |
| dc.description.abstract | Afrikaans: In vandag se ekonomies geïntegreerde wêreld is handel belangriker as ooit tevore. Nasies onderteken verskeie bilaterale handelsooreenkomste en is betrokke in verskeie vorme van ekonomiese integrasie. Ontwikkelende lande is ook betrokke in ekonomiese integrasie ter wille van belangrike ontwikkelings. Vrye Handel Areas (VHA) wat 'n vorm van ekonomiese integrasie is, word gevorm deur die verwydering van die tariewe op handel tussen lid lande en behou die outonomie in die opstel van tariewe op handel met nielede. Suider-Afrikaanse Ontwikkelingsgemeenskap het 'n Vry Handel Area in 2008 geword vir die ekonomiese integrasie van die lid lande. Literatuurverwysings toon dat ekonometriese modelle wat spesifieke/aparte/losstaande data gebruik (swaartekrag model in die besonder) nie op groot skaal benut word om die impak van vrye handel ooreenkomste op die Suid-Afrikaanse landbou op kommoditeitsvlak gebruik nie. Hierdie studie evalueer dus die impak van die Suider-Afrikaanse Ontwikkelingsgemeenskap Vry Handel Ooreenkomste (SAOGVHO) op die Suid-Afrikaanse landbou handel. Die studie fokus op Suid-Afrikaanse data vir landbou uitvoere en -invoere met SAOGlid lande en die EU-15 lande vir die vleis van beeste, mielies en koring vanaf 2000 tot 2011. Hierdie produkte is gekies op grond van hul sensitiwiteit, relatiewe belangrikheid in terme van hul bydraes tot die bruto waarde van landbouproduksie, verbruik en hul verhandelbaarheid. Die studie het die swaartekrag modelleringstegniek gebruik om die impak van die SAOG vrye handelsooreenkoms te ontleed. Die toegepaste regressiemetode wat gebruik is, is die Poisson Pseudo Maksimum Waarskynlikheid (PPML) beramer om die betekenis van veranderlikes binne die model te bepaal. Die PPML is gekies in plaas van die gewone minste vierkant (OLS) metode van beraming. In die teenwoordigheid van “Heteroskedasticity” kan die standaard OLS metodes die geraamde koëffisiënte bevoordeel wat twyfel oor die empiriese bevindinge te weeg bring. Die PPML verwerk die verskillende patrone van “Heteroskedasticity” en bied 'n natuurlike manier om te handel met die nul waardes in die data. Die resultaat toon dat daar 'n beduidende toename in die handel was vir die vleis van beeste en mielies onder die SAOG lid lande. Daar is 'n netto handel skepping en 'n toenemende intra-SAOG-blok vooroordeel vir vleis van beeste. Die intra-plaaslike handel in mielies is ook gestimuleer deur die implementering van die vrye handelsooreenkomste. Die studie kan nie 'n sterk blok effek in koringhandel identifiseer nie. Daar is dus ‘n afwyking in die handel van koring. Die empiriese bevindinge van hierdie studie kan beskou word as 'n intermediêre stap om die effekte van die relatiewe handel skepping en die verlegging van die handelsverkeer aan te spreek. Die studie dui ook die belangrikheid aan van die ontleding van die gevolge van SAOGVHO vir groot landboukommoditeite. Ten einde die vordering van die SAOGVHO skedule van die volledige liberalisering tot aan die einde van 2012 te bepaal, is dit noodsaaklik dat verdere studies gedoen word om die volledige liberalisering van die handel in die landbou sektor te bepaal. | |
| dc.identifier.uri | http://hdl.handle.net/11660/818 | |
| dc.language.iso | en | en_ZA |
| dc.publisher | University of the Free State | en_ZA |
| dc.rights.holder | University of the Free State | en_ZA |
| dc.subject | Southern African Development Community | en_ZA |
| dc.subject | Free trade -- Agriculture -- South Africa | en_ZA |
| dc.subject | Produce trade -- South Africa | en_ZA |
| dc.subject | Poisson Pseudo Maximum Likelihood (PPML) estimator | en_ZA |
| dc.subject | Gravity model | en_ZA |
| dc.subject | Trade diversion | en_ZA |
| dc.subject | Agricultural trade | en_ZA |
| dc.subject | SADC | en_ZA |
| dc.subject | Free trade agreements | en_ZA |
| dc.subject | Dissertation (M.Sc.Agric. (Agricultural Economics))--University of the Free State, 2013 | en_ZA |
| dc.title | Assessing the impacts of SADC Free Trade Agreements (SADC FTA) on South African agricultural trade | en_ZA |
| dc.type | Dissertation | en_ZA |