The Level And Variation Of Tariff Rates: An Analysis Of Nominal And Effective Tariff Rates In South Africa For The Years 2000 And 2001

This note presents a first cut at analysing the tariff schedule that is applied to South African imports. The aim is to show various ways in which tariffs on South African imports can be analysed such that DTI can develop in-house capacity to undertake such analysis on an on-going basis. A cursory comparison with earlier analysis suggests that tariffs have declined over the period 1997-2001, notably for manufacturing. However, further tariff liberalisation has been slow in last couple of years. Tariff peaks still exist for a number of broad categories of commodities such as processed foods (HS 0- 2), vehicles and components thereof (HS 87), tobacco products (HS 24), rubber products (HS 40) and clothing and textiles (HS6). About 25% of the HS8 commodity lines are faced with non ad-valorem tariffs, although the value of imports involved is not more than 4% of total import in 2000. An attempt is made to convert non ad-valorem tariffs in order to check for tariff peaks. The highest ad-valorem equivalents are recorded for processed food, in various stages, and textiles. Finally, duty collection rates, which can give an indication of the efficiency of duty collection are lowest for mineral fuels, motor vehicles and components thereof. Using a couple of static methods on effective tariff rates singles out the textiles, clothing, footwear, leather, motor vehicles, and some food processing sectors as directly and indirectly highly protected. Simple correlation coefficients suggest that duty collection rates and the nominal tariff schedule are reasonable indicators of effective rates of protection at the chosen aggregation level of activities.