Agricultural trade policy reform in South Africa

Abstract

This paper empirically investigates the impact of agricultural trade reform in South Africa. Using UNCTAD’s Agricultural Trade Policy Simulation Model (ATPSM), the study investigates two specific scenarios that capture the magnitude of (i) the economic impact of global agricultural trade reform in South Africa and (ii) the economic impact if the reform in South Africa is coupled with agricultural reforms in the European Union (EU). Trade reform focuses on substantial tariff reduction; although in the case of the EU, scenarios also include reduction in domestic support and export subsidies. The results show that a unilateral tariff reduction in a selected number of agricultural products amounts to welfare gains of US$21 million. These gains are three times higher when accompanied by extensive reforms in the EU.