Wednesday, August 4, 2010

The impact of EU - South Africa trade development and cooperation development on Botswana, Lesotho....

This paper apperas in Review of Economic and Business Studies, and examines the impact of the European Union-South Africa Trade Development and Cooperation Agreement (EU-SA TDCA) on trade between the RSA and Botswana, Lesotho, Namibia and Swaziland (BLNS). The results indicate that demand for imports are income elastic and price inelastic. This implies that imported goods are necessary and consumers and producers of the BLNS countries depend on them.
The results also indicate that the agreement between the RSA and the EU brought about increased imports to the BLNS countries. Demand for exports is also income elastic and price inelastic. The volume of exports to the RSA, from the BLNS, seems to increase following the agreement. The empirical findings imply first, that imports could have led to a crowding out of domestic production, which would negatively impact on domestic industry. Second, the EU-SA TDCA has benefited the BLNS countries by boosting their exports. The paper is available here.

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