| Summary: | Approved for public release; distribution is unlimited. === The pursuit of a seemingly unfruitful bilateral trade arrangement with South Africa, and continued participation in overlapping, but nonfunctional regional free trade areas, has left Zimbabwe in foreign trade dilemma, specially in the light of the deteriorating terms of trade with South Africa, her main trading partner and competitor for both mutual and regional trade. This thesis examines the various regional trade possibilities involving Zimbabwe and South Africa using the free trade area and customs union models of international trade. Whereas a functional bilateral trade agreement or a regional customs union culminating in a common market might improve Zimbabwe's regional competitiveness in the short run' due to South Africa's economic dominance and protectionist trade policies, Zimbabwe's potential to benefit from trade with non-participants would be severely curtailed. However, a broad free trade area, which allows flexibility to pursue national trade policies, seems less harmful. The analysis concludes that only a broad free trade area, superseding a' current eastern and southern African regional trade arrangements, would increase Zimbabwe's economic welfare. It would be in the interests of all regional countries to finalize a single broad free trade area rather than maintain the status quo
|
|---|
