'Sacu and China would benefit from FTA'

ALAN PEAT IN A subtle use of a highly-sophisticated computer model, the Southern African Trade Law Centre (tralac) has analysed the possible benefits of a bilateral free trade agreement (FTA) between the Southern African Customs Union (Sacu) and China. The key findings, according to Dr Ron Sandrey, a tralac senior research fellow, were that an FTA would lift economic growth and welfare in both SA and China. “But,” he told FTW, “the impacts on economic growth and welfare in the other Sacu countries (Botswana, Lesotho, Namibia and Swaziland), while positive, would be very small or negligible.” These findings, he added, are premised on an FTA that results in the complete removal of tariffs on bilateral trade and the removal of an estimate of China’s non-tariff barriers on SACU imports by 2015. “Sensitivity around the degree of liberalisation is included in the analysis,” said Sandrey. “However, the analysis does not consider the liberalisation of service trade, nor does it assume dynamic productivity gains associated with the trade liberalisation under the FTA. “The results, therefore, represent a “snapshot” of the changes at a disaggregated sectoral and regional level.” The research used computer model version 6 of the global trade analysis programme (GTAP).