The Effects of Non-Tariff Measures on Agricultural Trade Efficiency of South Africa Within the SADC

While tariff liberalization under regional trade agreements has progressed, non-tariff measures (NTMs) have emerged as a significant impediment to the realization of full trade potential, particularly in the agriculture sector where NTMs are especially prevalent and in the Southern African Development Community (SADC) where intra-regional trade is low. Despite the extensive available literature on this subject, the impact of NTMs on trade efficiency in the SADC has hardly been explored. Against this background, this study estimates the impact of NTMs on the efficiency of South Africa’s bilateral agricultural trade with 11 SADC member states using data from 2011 to 2022 and a stochastic frontier gravity model. The average efficiency is found to be 45.6 percent, implying that more than half of South Africa’s agricultural trade potential remains unrealized in the region due to inefficiencies. NTMs are found to be a source of inefficiency, the effect of which is larger than that of tariffs by a factor of 6. This result emphasizes an urgent need for harmonizing NTMs across SADC member states to reduce compliance costs which are associated with trade inefficiency. The study contributes to the literature by treating NTMs as man-made trade resistances that affect trade efficiency rather than trade volumes.