The impact of non-tariff measures on SADC agricultural trade

[摘要] Fifteen countries which are members of the Southern African Development Community(SADC) have embarked on a regional integration initiative. In 1996, a trade protocol thataimed to increase trade among members by removing trade barriers was signed. In the year2000, this protocol was implemented, leading to a Free Trade Area (FTA) in 2008. More than85 % of SADC trade was free of customs duties from 2008 onwards. However, while customtariffs were reduced, the share of SADC trade did not show any improvement over the tenyearperiod after implementing the trade protocol. Accordingly, the objective of this study isto examine the factors which contributed to lack of improvement in SADC trade, particularlythe role of Non-Tariff Measures (NTMs).One of the main challenges in analysing NTMs in SADC is the unavailability of relevantinformation. An SADC NTM database was built as a repository of official NTMs. In order toquantify NTMs, a database was classified, similarly to the international database. Agriculturalproducts at HS 4-digit level for ten SADC countries were included in this repository, andgroupedinto six main categories; namely animal products, cereals, horticultural products,oilseeds, industrial and processed products. The trade data challenges within SADC countries inadvertently prescribed the econometricmethods to apply for the set objectives of the study. The two main challenges of SADC tradedata are missing data for some years and high percentage of zero trade flows. A latentthreshold gravity model was employed with hierarchical specification to control for countryeffects. The hierarchical model captures individual country effects, such as the impact ofNTMs on trade volumes, and thus intra-SADC trade.Such impact was then assessed when an additional NTM is introduced or increases tradevolumes. The two effect models were examining the attributes of changes in regional trade, aswell as those attributes of change in NTMs. The effects NTMs were incorporated into themodel by weighting the number of NTMs by share of trade in the region, as well as ranks ofcountry NTMs within product groups. Types of NTMs which were estimated are Sanitary andPhyto-Sanitary measures (SPS), Technical Barriers to Trade (TBT) and an aggregation of allother NTMs which do not belong to the two groups. Results show that there is evidence NTMs were increasing at the same period when tariffswere being reduced. Using the inventory methods of evaluating presence and prevalence ofNTMs, it was also evident that NTMs are used across most agricultural products. Thepercentage of products affected by NTMs in 2010 was much higher than in 2000.The econometric model results show that all gravity model variables, GDP, border andlanguage were consistent with the theoretical expectations.Distance does nothave significantinfluence on SADC trade. The reason for this has to do with the trading pattern of SADCcountries, which is very high between contiguous members, compared to non-contiguousmembers. The estimation of zero observed trade, using a threshold model, provided additionalunderstanding of the role and reasons for such trade. The estimated effects of the observedzero trade showed that if this threshold is high, implying that trade costs (NTMs) arerestricting trade, then zero trade was observed. When high percentage of zero trade isobserved, then intra-SADC trade remains small or declines. However, if the threshold is low,intra-SADC trade increases, as was observed in the case of industrial products.The overall results confirm that NTMs do have an impact on intra-SADC trade. Industrial andcereal products are more responsive to NTMs than the other five product groups. A unitchange in NTMs by regional trade members has more effects on intra- regional trade than a unit change in trade value. That is the case because the SADC is already exchanging a largeshare of its total trade with non-SADC members. Therefore, attention should be given toaddressing the way NTMs are introduced.One of the important findings from the study is that the intra-SADC trade is affected more bythe effect of an additional NTM, than an additional unit of trade in value. The effect ofaddressing NTMs is one and half more than those of additional trade value. So, in order toimprove intra-SADC trade performance, focus must on addressing the NTMs and growingtrade. In addressing NTMs, it does not necessarily require removing or even reducing them. Itis about making it easy to comply with them. SADC trade can be improved substantially byaiming to harmonise NTMs and overall policies.

[发布机构] University of Pretoria