THE IMPACT OF THE EU FREE TRADE AGREEMENT ON SOUTH AFRICAN AGRICULTURE: A GENERAL EQUILIBRIUM ANALYSIS

The objective of this paper is to analyse the effects of the concluded EU free trade deal on South Africa with special emphasis on the agricultural sector. The study makes use of the GTAP software and methodology developed at Purdue University, which provides a very convenient and efficient way for interpreting changes in trade flows due to tariff structure adjustments. The paper gives a detailed account of change in trade flows together with the resulting welfare effects. If is found that both South Africa and the EU will experience welfare gains as a result of the agreement. Furthermore it is determined that exports of dairy products to the EU will increase by more than 35% while exports of vegetables and fruit, and other agricultural products will also increase by 25% and close to 30% respectively.