Most of the large tariff reductions achieved in multilateral trade negotiations have involved the use of tariff-cutting formulas, such as the "Swiss" formula. But the wide variations in initial tariff rates may create a demand for new approaches in the Doha Development Agenda. This paper surveys some options and examines the implications of a range of "flexible" formula approaches that target tariff escalation and peaks, and allow policy makers to directly target how far they will move towards free trade, while providing some flexibility for trading off reductions in peak tariffs against reductions in low-tariff sectors.

In September 2000, the SADC FTA has been launched wherein full liberalization of trade is expected by 2012. The SADC FTA is intended to act as a catalyst for increased regional integration. Nevertheless what are the benefits expected from the SADC FTA given the economic structure disparities existing among its participating members? Is it really feasible to expand intra-SADC trade? To address the potential of increasing intra SADC trade we present and analyze three complementary approaches. The first two ones refer to trade indices: export diversification indices, revealed comparative advantages and trade complementarity indices, and the last one is based on gravity model. Given that SADC countries have concentrated and similar comparative advantages, our static analysis suggests that the room for further trade within SADC is limited. Nevertheless, some results and ongoing researches show that development of intra industry trade might have trade creation effects in the region.

This paper analyzes a number of the challenges confronting developing countries seeking to use the WTO Doha negotiations to promote their economic growth and performance. A precondition for success is to have clear objectives and to take a pro-active stance. But a key necessary condition for success will be to recognize the political economy of reform--both at home and in partner countries. Little progress will be made on key issues unless there are major stakeholders within countries that perceive the overall package to be beneficial. A number of possible focal points that could be used both as targets and as benchmarks for reciprocal negotiations are discussed, as is the need for mechanisms to increase the domestic 'ownership' of WTO agreements.

The negotiating mandate for the Doha Development Agenda is both broad and comprehensive. This paper has tried to focus on the basic mandate given to negotiators in the area of tariffs and trade in industrial products. With respect to developed country markets the key issue is how to tackle the residual protection arising from low overall levels of protection. We have identified a number of products at the four digit level where issues of peaks and escalation need to be addressed. For developing countries there are two issues - their high levels of tariffs and the limited coverage of bindings for some members. These, however, do not preclude problems of peaks and escalation such as those that we have identified in developed country markets. Finally, for LDCs the issues are the degree of effective non-reciprocal market access granted by developed countries, and the very high levels of protection they face in developing country markets, and the role that high levels of protection are playing as industry policy instruments in their own economies.

This paper is about changes in the regulation of citrus exports from South Africa. It traces the changes from state regulation of the citrus chain to very recent forms of private regulation in the context of highly competitive global markets. The paper argues that while these forms of private regulation are positive in that they are encouraging the industry to shift its focus from volume to quality in line with overseas market demands, there are also limits and problems with private market regulation. The evidence thus far suggests that private regulation is limited to certain export chains associated with particular overseas markets and that is serves particular private interests.

This paper analyses the historical performance of the South African manufacturing sector in an international perspective. After a brief overview of the industrialisation process of South Africa during the 20th century, a binary comparison of manufacturing output and productivity between South Africa and the US is presented. The industry-of-origin approach is used to construct unit value ratios (UVRs), as an alternative to the exchange range for converting US and South African output data into the same currency. Subsequently, the UVRs are used to estimate labour and total factor productivity levels for total manufacturing and 13 manufacturing branches for the period 1970-1999 in comparison to the USA. Next, these results are used to compute relative unit labour costs, which give shed light on the international competitiveness of the South African manufacturing sector at a detailed level. The study is part of the International Comparisons of output and Productivity (ICOP) project carried out at the universities of Groningen and Eindhoven.

We find that there exists a considerable labour and total productivity gap between the US and South Africa, which is continuously widening over time. In 1970, labour productivity stood at 32 percent of US level, while it was only 20 percent in 1999. With respect to relative unit labour costs, the results show that on average, South Africa is competitive with the USA, albeit there are some industries which show consistent relative unit labour costs above US level. here

The paper first outlines the history of industrial and trade policy in the industry. It highlights the significance of the transition from import-substitution policies to export promotion policies. It then provides an analytic exposition of the welfare costs and benefits of the current export complementation programme. We find that:

• The current policy creates rents in the industry that are borne by South African motor vehicle consumers;
• These rents accrue to vehicle assemblers, vehicle importers and components manufacturers;
• The exact method of phasing down the programme will affect the size of these rents;
• Some of the "new" exports of components under the MIDP may be uneconomic in the sense that they would not cover costs in the absence of the MIDP--this hurts welfare;
• Whether or not components exports are economic, the programme encourages larger scales of production, thereby reducing costs. This last effect could be large enough to outweigh the welfare losses associated with any uneconomic exports of components.

Over the past two decades, South Africa's agricultural sector has been extensively liberalised. As a result, a closer examination of the data shows some interesting trends in international trade in food and beverage products. First, exports of processed foods and beverages have shown strong growth. Despite the large increase in exports to South Africa's traditional trading partners, largely in Europe, exports of processed goods to the SADC region have shown stronger growth. Second, imports of 'non-traditional' commodities (i.e. unprocessed goods other than rice, coffee and tea) have also grown strongly. The purpose of this paper is to provide some explanations for these trends

This study investigates the impact of a free trade area (FTA) on industrial distribution within the Southern African Development Community (SADC). As such the study is grounded in new theories of international trade analysing the impact of trade agreements on countries of different sizes. SADC represents a consortium of countries of radically different size, and further trade integration has given rise to concern of polarisation of industry to the larger countries. The study applies existing international experience and theory to the SADC scenario. An analysis of industrial location Gini coefficients is used to measure distribution of industry in the region with regard to external economies. Coefficients are calculated for the industries of five SADC countries and again for South African provinces, which are then compared to US coefficients. Thus the analysis takes three parts. Firstly, Gini coefficients are calculated for industries from the five SADC countries, South Africa, Zimbabwe, Mauritius, Malawi and Botswana over a fourteen year time period (1985 - 1999). Secondly, the SADC situation is compared to the present extent of localisation of South African industries. Lastly, a trend path is inferred from localisation experience in the USA over the last century. Using the above analyses, two scenarios are established. The first scenario uses the South African experience as a basis of completed integration within a Southern African setting. It is found that in the short term there is likely to be polarisation of industry towards the core. The following industries are most likely to be affected by agglomeration forces, apparel, textiles, furniture and fixtures and electrical machinery. However, as transport costs decrease further with reductions in non-tariff barriers, the pull of the low wage periphery will eventually dominate the initial centripetal forces. Thus, the Krugman and Venables (1995) U-shaped pattern of localisation occurs. The second scenario envisages that SADC is already at an advanced stage of the U-shaped cycle, where agglomeration forces are presently near their height. This would indicate a lower value of polarisation towards the core. Both scenarios lead to the conclusion that the cycle will result in a net gain of manufacturing to the periphery. This is because dispersion forces will affect a larger base of manufacturing than will be influenced by the pull to the core. In order for the peripheral countries to gain, it is thus imperative that member countries are locked into the agreement and that integration goes 'all the way'. It is not sufficient for tariffs to be reduced in isolation. Other transport costs (i.e. NTBs) need to be reduced as rapidly as possible, for it is at intermediate levels of transport costs that industrial agglomeration towards the core is likely to take place.

Economists seem to agree that the theory of comparative advantage can be extended to trade in services. Countries with relatively large endowments of skilled labour and capital and relatively few natural resources should export more services and less mining or agricultural goods than those relatively rich in land or resources.

Although some econometric work has been done on the determinants of trade in services, the results are inconclusive. This paper improves on these studies, applying similar methodologies but using better and more comprehensive data that are now available.

One important spin-off from the econometric analysis is that the models can be used to identify and quantify the most important determinants of trade in services in each sector. The resulting coefficients can also be used to predict South African trade in services.

In total, four different models are presented for each of the eight service sectors. First, a simple two-factor Heckscher-Ohlin model is tested against two different dependent variables. A further two models are developed by incorporating and testing a much wider selection of explanatory variables.

The results are encouraging and offer some empirical support to the application of comparative advantage to trade in services. They show that human capital and economic development are important determinants of competitiveness in the service industry. On the other hand, countries with abundant land or labour are less likely to specialise in services.

South Africa is not predicted to specialise in any of the eight service sectors. In all but one sector (tourism), South African service exports are predicted at less than 1% of merchandise trade. Moreover, in all eight sectors the predicted ratio of South African service trade to merchandise exports is lower than the actual trade ratios for more than half of the countries included in the sample.