Bilateral Free Trade Agreements and Customs Unions: The Impact of the EU Republic of South Africa Free Trade Agreement on Botswana

37 Pages Posted: 22 Aug 2008

See all articles by Scott McDonald

Scott McDonald

Oxford Brookes University

Terrie Louise Walmsley

Purdue University - Center for Global Trade Analysis

Abstract

The EU has indicated that after 2008 its trade relationships with developing countries will be dominated by the development of preferential trade agreements. Although not a consequence of the Cotonou Agreement, the free trade agreement between the EU and the Republic of South Africa (EU RSA FTA) was clearly one of the first fruits of this approach to trade relationships. However, there is no evidence that the design of the EU RSA FTA incorporated a comprehensive general equilibrium evaluation of the agreement for either the signatories or the other southern African nations. The analyses reported here indicate that while the EU RSA FTA may substantially benefit the signatories, there are appreciable negative impacts for other states, especially the Republic of South Africa's immediate neighbours. Moreover, the analyses indicate that the structural adjustments for African economies signalled by the FTA are substantial, which implies that there will be substantial economic costs associated with the FTA.

Suggested Citation

McDonald, Scott and Walmsley, Terrie Louise, Bilateral Free Trade Agreements and Customs Unions: The Impact of the EU Republic of South Africa Free Trade Agreement on Botswana. World Economy, Vol. 31, Issue 8, pp. 993-1029, August 2008, Available at SSRN: https://ssrn.com/abstract=1245624 or http://dx.doi.org/10.1111/j.1467-9701.2008.01112.x

Scott McDonald

Oxford Brookes University

Gipsy Lane
Headington
Oxon. OX33 1HX, OX3 0BP
United Kingdom

Terrie Louise Walmsley

Purdue University - Center for Global Trade Analysis ( email )

1145 Krannert Building
West Lafayette, IN 47907
United States

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