Inderscience Publishers

The SADC region and EPA/EBAI – trade balance analysis

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This paper investigates the potential trade balance outcomes of the economic partnership agreement (EPA)/everything but arms initiative (EBAI) policies in the Southern African Development Community (SADC) region using the Global Trade Analysis Project (GTAP) 7 model and database. The analysis of these policies therefore make conclusion on SADC member states changes in trade balance overall, per commodity groups and on overall welfare outcomes as a result of these policies. The study has found that although the EPA/EBAI policies potentially result in overall welfare gain in the SADC region this welfare gain will only be 6% of the European Union (EU) 27. Analysis of trade balance outcome reveals that the SADC African, Caribbean and Pacific (ACP) region will suffer a negative trade balance of US$1,596.8 million with the EU, on the other hand, having a positive trade balance of US$105.61 million. Since a positive trade balance is important for sustainable development of nations, these results once again throw into doubt the potential sustainable economic growth benefits of these policies to ACP countries.

Keywords: trade balance, welfare gains, EPA–EBAI policies, sustainable development, sustainable economic growth, sustainability, Southern African Development Community, SADC, economic partnership agreement, EPA, everything but arms initiative, EBAI, global trade analysis, sustainable economy

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