Barriers to trade

Question 1

Aim of eliminating barriers to trade

Answer 1

Increase trade while connecting infrastructure facilities and promote effective transportation of traded goods between destinations

Question 2

Economic integration

Answer 2

Can remove tariff barriers between countries

Question 3

Spatial Integration

Answer 3

The development of targeted infrastructure linkages between countries can facilitate the physical mobility of goods in the region

Question 4

Tariff barriers (definition and removal)

Answer 4

Taxes are placed on imports from other countries to protect local producers, manufacturers, and intermediaries.
Removal of barrier = trade liberalisation through economic integration

Question 5

Non tariff barriers (definition and removal)

Answer 5

Restricted physical ability of freight vehicles to transport traded goods between countries.

Removal= Trade routes through spatial integration

Question 6

Effect of Import Tariffs

Answer 6

Negative effect on trade between countries and affects many role players in the supply chain

Question 7

Economic integration Implementation

Answer 7

It is implemented in stages to eliminate tariffs and stimulate trade.

Different levels are implemented, and each level signified increased integration and elimination of barriers to trade.

Most successful example of regional integration = EU (implemented all 5 levels of economic integration)

SADC only achieved the first 2 levels

Question 8

5 levels of economic integration

Answer 8

1. Preferential FTA
2. FTA
3. Customs union
4. Single market
5. Economic and monetary union

Look at table in notes for discriptions

Question 9

Spatial Integration in SADC

Answer 9

Non-tariff barriers -> Physical constraints includng terrain that results in a lack of accessibility.

Primary non-tariff barrier = lack of quality of physical road and rail infrastructure in SADC. = Negative impact on trade

Question 10

Regional transport supply chain

Answer 10

Regional transport of G/S and the efficient functioning of regional transport supply chains incorporate 3 entities:

1. Customs and control agencies (regulate transportation of traded goods)
2. Transport companies (transport goods from point A to B)
3. Traders (producers, manufacturers, intermediaries, consumers that acquire G/S from each other)

Question 11

Steps in the regional supply chain

Answer 11

1. Initiation of transport in country A
2. Loading transport vehicles in country A
3. Control en route in country A
4. Border procedures in country B
5. Customs clearance at destination in country B

Question 12

The primary challenge to the functioning of the supply chain

Answer 12

Different customs and control agencies that operate in each country

Question 13

Transit system

Answer 13

Procedures, institutions, infrastructure and legal framework that controls the movement of goods.

Developed by each country to guide how transport should take place in their country.

Examples include Max loads trucks can carry, how certain goods can be transported, and costs of using roads with regards to different vehicles.

Question 14

The lack of a regional integrated transport system is reflected in the unreliability of trade routes.

How can unreliable trade routes become a reality?

Answer 14

1. Transport time unpredictability (not many options when a link in the supply chain fails)
2. Service interruption prospects (bottlenecks and lack of infrastructure)
3. Variety of role players (public control and regulatory agencies. Transactions take place between many roleplayers, some of which have conflicting agendas)

Question 15

How can you improve the reliability of trade routes?

Answer 15

Essential to have an integrated regional transport system

Question 16

Physical trade route infrastructure

Answer 16

Physical infrastructure seeks to increase accessibility between countries in the region by eliminating physical hindrances that limit internal mobility.

Objective -> goods to move freely

Question 17

Trade routes

Answer 17

Trade routes connect landlocked countries (such as Botswana, Zambia and Lesotho) with ocean ports and national trade networks (including those of Angola, Mozambique, Tanzania and South Africa), increasing trade efficiency and productivity, and unlocking new development opportunities.

Aid the mobility of people and goods

primary function = facilitate trade and increase accessibility

Question 18

Transport costs and physical infrastructure

Answer 18

High transport costs = limited quality of infrastructure = limited competitiveness

Question 19

For efficiency, there are two functionalities that should be followed:

Answer 19

1-Connecting functionality (efficiently facilitate trade in goods between two or more towns and cities)
2-Organising functionality (increased access between countries within our region)

Question 20

Advantages of targeted investment in physical trade route infrastructure

Answer 20

Direct revenues - from infrastructure usage (fuel levies and toll charges)

Secondary impacts - through a collection of transport functions (increased productivity imports) and the development of economies of scale

Value-adding potential -logistical activities along the line of the route

Political advantages - fulfilling a leadership role in the region through increased economic integration and trade

Question 21

Linear development

Answer 21

development spreads outward from the
physical connecting infrastructure this may occur as activity increases on the trade route between two large towns or cities and in the process encourages the development of additional economic activity in close proximity to the route

Question 22

development of a trade route takes

place in three phases:

Answer 22

Phase 1: There is an absence of physical infrastructure that connects member countries
Therefore, there is limited trade between the
member countries of the region

Phase 2: Targeted investment and management of resources bring about the development of physical infrastructure
Trade in the region increases however some
weakness in the physical trade route infrastructure remains with traffic bottlenecks and missing infrastructure links contributing to inefficient trade facilitation

Phase 3: (ideal phase) Through continued investment and resource coordination, in addition to the development of non-physical infrastructure to facilitate effective trade between different countries, weaknesses in the trade routes are eliminated as they fulfill their potential as investments for spatial integration

Question 23

SADC physical infrastructure

Answer 23

SADC focuses on the improvement and maintenance of multiple trade routes. Their goal is to increase regional trade due to economic and regional integration.

Question 24

SADC secretariat

Answer 24

SADC regional institution that is responsible
for planning formulating a sufficiently lobbying member countries for
the implementation of transport policies.
The prime aim of these transport policies is
improving the physical trade route infrastructure by addressing the missing links and maintaining existing routes

SADC Secretariat must oversee this policy
the planning process to improve trade between member countries

Question 25

Sector Plan

Answer 25

Prioritizes the improvement of SADC and its
members transport networks by identifying substandard infrastructure linkages that may hinder effective trade facilitation

Upon identifying weak linkages, the Transport Sector Plan proposes certain special interventions to improve the network.
It recommends specific infrastructure projects that would propel the quality of connecting road infrastructure in the region and significantly improve trade facilitation between member countries.

Question 26

How are physical infrastructure projects financed?

Answer 26

SADC does not have a development fund to invest in and finance specific physical infrastructure projects, therefore the investment is dependent on the public and private sectors in the country the project is located in

Question 27

2 parts of the Non-physical trade route infrastructure

Answer 27

1. interoperability

2. market access