South Africa's trade in environmental goods: investigating bilateral potential exports to select developed and emerging countries (2007 to 2013)
Master Thesis
2016
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University of Cape Town
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Climate change is one of the greatest problems confronting the world today. It threatens many economies, health systems, and livelihoods, especially for the rural poor in many developing countries. As a consequence, climate change is increasingly generating global concerns and receiving global attention. This emergent trend is accompanied by rising recognition of the role played by international trade in environmental goods (EGs) as a means to deal with the environmental pressures associated with climate change. Trade liberalization in EGs plays an important role in the diffusion of cost effective environmental goods and services, thus advancing global climate change action and sustainable development. Paragraph 31 (iii) of the Doha Ministerial Declaration of 2001 provides a mandate to WTO members to enter into multilateral negotiations on 'the reduction, or the elimination of tariffs and non-tariff barriers (NTBs) to environmental goods and services. To this end, some WTO members are currently negotiating a plurilateral pact (Environmental Goods Agreement) with the view to move beyond the long impasse in the Doha Round of negotiations. The impasse in the Doha round of negotiations is attributed to a number of contentious issues, with the lack of a universally agreed definition on what constitutes environmental goods and services being the most sensitive one. In light of the increasing global demand for EGs, most emerging economies are experiencing higher growth rates relative to developed countries and are expected to grow even faster in the future. Furthermore, emerging economies, including South Africa, are increasingly becoming important exporters and importers of EGs and stand to benefit from existing and potential export opportunities in the global market. The South African environmental goods and services industry is strong yet small in terms of international standards. However, considering its growth rate over the past few years, it is interesting to note that it is considered as an important exporter and importer of some environmental goods and services. Against this background, the aim of the study is to examine if South Africa is currently exploiting potential bilateral trade opportunities in select developed (United States of America, United Kingdom and Germany) and emerging (Brazil, India and China) economies or trade is limited due to high MFN tariffs. The results of the trade-chilling analysis indicate that trade between South Africa and the select group of economies is limited. However, the limited or lack of bilateral trade cannot be attributed to high tariffs and may be as a result of Non-Tariff Barriers (NTBs). The analysis also revealed areas of export opportunities for South Africa to explore and expand future exports to the selected markets. Although there were few areas where high tariffs were responsible for the limited bilateral trade, the results of the study suggest that low tariffs are imposed in most of the EGs exported by South Africa. For trade policy practitioners and negotiators, the implication of this study is that NTBs are important obstacles to EGs trade and should be given close attention in the context of WTO negotiations. For this reason, further studies aimed at identifying NTBs responsible for limited bilateral trade is important as this will enable international trade policy practitioners to enhance their understanding and to effectively address them, thus improving South Africa's export prospects in the selected markets. For businesses, the study results provide valuable export market information which identifies areas of export opportunities to focus on in the future.
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Simelane, S. 2016. South Africa's trade in environmental goods: investigating bilateral potential exports to select developed and emerging countries (2007 to 2013). University of Cape Town.