GTAP Resources: Resource Display
| GTAP Resource #7441 |
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"Regional Economic Agreement (REI) and global value chains (GVCs). An empirical analysis of the SADC Customs Union (CU) using a computable general equilibrium model (CGEM)." by Hove, Privilage Abstract Despite growing interest in GVCs, there is no research that has quantitatively assessed SADC’s integration in GVCs and provided evidence-based policy recommendations using a CGE model. Thus, the main objective of this study is to evaluate how the proposed SADC CU affects SADC countries' participation in GVCs, focusing on backward and forward participation in agri-food sectors, using a CGE model. The agri-food sectors were selected since the region is well known for its agricultural production, and the SADC Industrial Roadmap in 2018 identified these sectors as having the potential to promote regional and GVCs, which need to be supported. Using the GTAPMRIO database and the GTAP-VA module, the study employs ex-ante analysis with three counterfactual scenarios: common external tariffs, unemployment closure, and increasing Armington elasticities by 20%. Results on backward and forward participation are presented at the country, global, regional, and sector levels. The results show significant variability in benefits across SADC countries, with South Africa, Zimbabwe, and Tanzania experiencing more substantial gains than Malawi and Botswana due to initial protection levels, economic size, level of GDP, the composition of trade, and sectoral participation intensity. While the new policy promotes regional integration more than total GVC and enhances backward participation, forward integration remains less affected. It also shows that agri-food sectors—animal products, vegetables, fruits, sugar, and beverages—will become more competitive in global markets. Policy implications include (1) addressing disparities, fostering inclusivity, and providing targeted support to smaller economies to ensure a more equitable distribution of benefits; and (2) the need for careful tariff calibration and infrastructure investment to maximize the potential benefits of the CU and enhance SADC’s position in GVCs. |
| Resource Details (Export Citation) | GTAP Keywords | ||||||||||||||||
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- GTAP Data Base and extensions - Economic development - Multilateral trade negotiations - Supply chains - Advances in quantitative methods - Calibration and parameter estimation - Model integration and coupling - Econometric methods - Africa (Southern) |
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Public Access  Paper (2.2 MB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
