Annual Forum Papers

Prospects for Increasing Trade among SADC Countries

  • Year: 2002
  • Author(s): Sophie Chauvin; Guillaume Gaulier

In September 2000, the SADC FTA has been launched wherein full liberalization of trade is expected by 2012. The SADC FTA is intended to act as a catalyst for increased regional integration. Nevertheless what are the benefits expected from the SADC FTA given the economic structure disparities existing among its participating members? Is it really feasible to expand intra-SADC trade? To address the potential of increasing intra SADC trade we present and analyze three complementary approaches. The first two ones refer to trade indices: export diversification indices, revealed comparative advantages and trade complementarity indices, and the last one is based on gravity model. Given that SADC countries have concentrated and similar comparative advantages, our static analysis suggests that the room for further trade within SADC is limited. Nevertheless, some results and ongoing researches show that development of intra industry trade might have trade creation effects in the region.