Do Free Trade Agreements Create Trade for South Africa?

This paper shows that South Africa’s exports and imports had been determined by the normal variables found in gravity models, namely GDP, population and distance. However, differences in the composition of trade had resulted in distance from markets having a greater adverse effect on exports than imports. Cross section estimates of the impact of the free trade agreements between South Africa the EU and SADC failed to show significant effects. Panel estimates on the other hand yielded positive effects for EU exports and imports with South Africa. The SADC FTA was found to have stimulated South Africa’s exports to SADC but with little effect on SADC imports into South Africa. Finally, it was found that preferential access under the US AGOA had not particularly benefited South African exporters.