What you have asked isn't even a question. Could you try a little
harder when phrasing it?
I will assume you are asking about customs unions, and I will contrast
this to a free trade bloc.
A customs union is where nations can trade freely with one another,
but may have their own tariff rates. A free trade bloc has free trade,
but has one common tariff for the whole bloc.
A customs union is politically easy, but an administrative nightmare.
Nations simply sign, and the union is born. But if country A has a 50%
external tariff, and B has a 2% external tariff, what is to stop firms
from importing into B, and transporting into A? In order to maintain
the 50% tariff rate, border patrols must exist. But there are further
complications. What if some of a good in B was produced locally, and
the rest produced outside the union? When does a locally produced good
stop being a locally produced good?
A free trade bloc is much simpler. Internally, there is no barrier.
Externally, the tariff barrier is the same. So it doesn't matter if a
good is imported into A or B, there is no incentive for taxation
arbitrage. However, it is politically difficuly because of the
surrender of national sovereignty to a supernational body, the trade
bloc.
Unfortunately, your question mentions only South Africa, which can't
form either a customs union or a free trade bloc with itself. Do you
mean the rest of Africa? As I understand it, very few statistics are
available for what occurs in Africa.
Please be more specific. |