WIN-WIN?

CityPress - - Business -

A num­ber of stud­ies have tried to gauge who would gain what if the African coun­tries in­volved in the TFTA all dropped their tar­iffs.

Although it is a very un­likely sce­nario, such a to­tal switch to free trade would likely ben­e­fit South Africa and a few other larger African economies above all else – and ac­tu­ally hurt many smaller coun­tries.

The Trade Law Cen­tre re­cently pub­lished a study on the hy­po­thet­i­cal im­pact of halv­ing the bur­den of non­tar­iff bar­ri­ers, com­pared with re­duc­ing all tar­iffs to zero on the en­tire con­ti­nent.

Zero tar­iffs re­sult in a very un­even ben­e­fit, where mostly South Africa wins, with Nige­ria a dis­tant sec­ond. Zim­babwe, in par­tic­u­lar, loses sig­nif­i­cantly be­cause of its re­liance on tar­iff rev­enue.

The hy­po­thet­i­cal halv­ing of non-tar­iff bar­ri­ers, how­ever, leads to a much larger wel­fare gain for the con­ti­nent that is also bet­ter spread out. South Africa still wins, but so do the other ma­jor economies, in­clud­ing Kenya, Egypt, Nige­ria and Tan­za­nia.

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