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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Intra-industry trade and the prospect of trade liberalisation in South Africa
Author:Parr, R.G.ISNI
Year:1994
Periodical:South African Journal of Economics
Volume:62
Issue:4
Pages:393-405
Language:English
Geographic term:South Africa
Subjects:trade policy
domestic trade
External link:https://doi.org/10.1111/j.1813-6982.1994.tb01235.x
Abstract:This study examines the link between trade policy and intra-industry trade (IIT) in South Africa, notably in the context of South Africa's offer (in September 1993) to the GATT in respect of reductions in the level of tariffs and in the variation of tariff rates. Fears are often expressed that the 'cold wind' of liberalization will render much of South African industry uncompetitive, leading to severe adjustment costs, if the ensuing trade growth is of the inter-industry variety. It has been argued that adjustment costs to trade liberalization are lower when new trade is IIT, because displaced resources can be transferred more easily within the firm or industry than between industries. This paper first discusses various measures to determine the proportion of IIT in total trade. Then it looks at the extent of IIT in South Africa. The conclusion is that, in total, the prospective results of trade liberalization for South Africa is one of increased inter and intra-industry trade. South Africa's IIT is the highest in manufactures and is expected to increase, even if accompanied by an increase in net trade (imports) in manufactures, which could be offset by the anticipated net trade growth in agriculture (exports). Bibliogr.
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