GTAP Resources: Resource Display
| GTAP Resource #7511 |
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"The Impact of Geopolitical Polarization on Trade Policies in Africa: A BRICS Perspective" by Hailesilassie, Mussie Mindaye Abstract On March 21, 2018, African nations ratified the African Continental Free Trade Agreement (AfCFTA) to unify the continent under a cohesive policy framework. Despite this initiative, Africa's trade remains heavily reliant on external partners. Geopolitical polarization complicates consensus on trade policies among African nations. This study examines the impact of U.S. policy towards BRICS, an informal group supported by various nations in Africa, Asia, Latin America, and Eastern Europe, by developing three scenarios considering a 100% tariff imposition and potential retaliatory measures and their implications for Africa. The GTAP model is employed to assess the overall economic impact. The findings indicate that tariffs between BRICS and the USA led to a decline in GDP and welfare for both, but not for non-BRICS African countries in the retaliation scenario and the BRICS African economy in scenario three. Import prices rise for all products, especially in agriculture, light manufacturing, and processed food, while export prices decline for the USA and rise for BRICS for a similar scenario. The USA showed an increased domestic output in heavy manufacturing and mining, whereas BRICS experienced a decline in light manufacturing. Import volumes decrease for all products in BRICS and the USA, except for mining and extraction. Export quantities decrease across all product categories for the USA and in manufacturing for BRICS. Endowment prices decrease in the USA and BRICS but increase for the EU, non-BRICS African countries, and the rest of the world. The analysis reveals trade creation among BRICS countries and trade diversion from the USA. In conclusion, geopolitical polarization induces trade distortion effects within the global economy. Although Africa's trade share in the global market is small, the impact remains significant. Even without direct tariffs on Africa, the measures indirectly affect the continent. Keywords: Imposition of tariffs, BRICS, CGE, Africa. |
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- GTAP Data Base and extensions - Bridging CGE and new quantitative trade (NQT) literature - Baseline development - Africa (Central) - Africa (East) - Africa (North) - Africa (Southern) - Africa (West) |
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Public Access  Paper (245.2 KB) 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
