A Free Trade Agreement between the Peoples' Republic of China and the Republic of South Africa: A Feasibility Study

Abstract

This study will look at the feasibility of a free trade agreement between the Peoples Republic of China (PRC) and the Republic of South Africa (RSA). The formulated research question will explore the various advantages to the South African economy of such an agreement. This study begins with the theoretical framework of regional integration agreements and the classical rationale behind free trade. It is this understanding that motivates the one hundred and fifty plus, current agreements worldwide. This essay then tackles static and dynamic analysis of trade flows and high level quantification of increased trade. Full tariff data is analysed at the 21 chapter level. Should South Africa engage in a regional trade agreement with China, if so, which specific industries are most sensitive to tariff reductions? Finally the study concludes with policy recommendations and a suggested asymmetry in FTA structure.

Keywords: Free Trade Agreement, China, South Africa, trade, FTA, SADC, trade

JEL Classification: F15, F17