Abstract
In a sequential Computable General Equilibrium analysis, we investigate the likely effects of the EU-South Africa Free Trade Area (FTA), with a special emphasis on South Africa’s growth prospects. We find that the FTA would increase South African welfare as well as output. We note, however, that the gains are very modest when viewed in the context of the time period over which full adjustment to the treaty provisions is expected to occur. Only 2 percent of the economic growth expected over the next 18 years in South Africa can be linked to additional trade associated with the FTA. The long phase-in period and the partial benefits of regionalism limit the importance of trade as an engine of growth.
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