International Business

Gaining from Trade in Southern Africa: Complementary by Carolyn M. Jenkins, Lynne Thomas, Jonathan Leape

By Carolyn M. Jenkins, Lynne Thomas, Jonathan Leape

Policy-makers in Southern Africa are more and more confident that local exchange liberalization can increase development functionality and stimulate improvement through the sector. To be successful the place earlier makes an attempt have failed, despite the fact that, governments needs to handle key concerns. the 1st of those is coverage coordination--the extensive diversity of household rules has to be made appropriate with the proposed exchange reforms. the second one is establishment building--concerted consciousness needs to be dedicated to strengthening susceptible associations and infrastructure. The participants are one of the major professionals on nearby integration in Africa.

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Extra info for Gaining from Trade in Southern Africa: Complementary Policies to Underpin the SADC Free Trade Area

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While these findings have important implications for developing countries, the creation of institutions becomes more important in creating a framework for policy coordination, as discussed below. 3 See Berg (1988); Collier and Gunning (1996); Decaluwé et al. (1995); De Melo et al. (1993); Elbadawi (1995); Fine and Yeo (1994); Foroutan (1993). 4 This study was commissioned and the initial fieldwork undertaken before the Democratic Republic of Congo and Seychelles joined SADC. The detailed analysis therefore focuses on 12 of the current 14 members of SADC, although the key findings are relevant to all.

For this reason, the credibility of a policy package and the extent of risk involved in changing private behaviour is more important than the announcement of new initiatives in isolation. It is extremely important that, when a programme of SADC trade liberalisation is implemented, it opens up profitable new investment opportunities and provides access to cheaper sources of goods and services, and that there is minimal risk of these new opportunities evaporating in the foreseeable future. The next section distinguishes the components of a credible policy package and identifies those variables that indicate that a trade liberalisation may not be sustainable in the longer term.

Moreover, such rules of origin enable countries to ‘export’ protection to each other in order to avoid trade deflection (which occurs when goods or services enter through the member country with the lowest tariff rate and are trans-shipped). In addition to other sources of trade diversion, rules of origin can provide incentives for producers in one partner country to purchase higher cost inputs than are available from the ‘rest of the world’ in order to satisfy rules of origin allowing export of the output produced to a member country duty-free (Krueger, 1997: 178).

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