The extent of trade liberalisation in the 1990s : revisited

Abstract

In a recent article in this journal, Fedderke and Vaze (2001:436-473) undertook an analysis of the extent and effects of trade liberalisation in South Africa during the 1990s. The study (hereafter referred to as the FV study) quantifies the extent of trade (tariff) liberalisation in SA using a measure of the effective protection rate (ERF). Based on their ERP calculations the FV study finds that "more of South Africa's output is protected by tariffs in 1998 than in 1988", and hence deduces from this that, "the much-hyped liberalization of the South African economy has not been fully realized" (Fedderke and Vaze, 2001:447). The purpose of this paper is to ascertain if this is indeed the case and if new evidence exists that gives more complete answers. The first part of the paper provides a brief overview of some theoretical considerations relating to the measurement of ERP and its use as an indicator of the extent of trade liberalisation. The second part documents the tariff liberalisation undertaken by South Africa during the 1990s. ERP calculations are undertaken in part three and these are compared to those in the FV study. Some conclusions are drawn in the last section.