The SADC region and EPA/EBAI – trade balance analysis Online publication date: Fri, 21-Nov-2014
by Mphumuzi A. Sukati
International Journal of Sustainable Economy (IJSE), Vol. 4, No. 2, 2012
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.
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