IMPLICATIONS FOR THE BLNS COUNTRIES OF SOUTH AFRICAN TRADE POLICY REFORMS

The document examines how the BLNS countries are constrained by South Africa's regional dominance and the SACU common tariff. It highlights a critical vulnerability: because BLNS government revenues rely heavily on the SACU customs pool, South African trade liberalisation could decimate their budgets. While some scenarios show welfare gains—particularly for Swaziland's sugar exports to the EU—these are offset by massive potential losses in tariff revenue. The paper argues that the BLNS have limited independent trade policy space and suggests that negotiations with the EU should be conducted on a Customs Union-to-Customs Union basis.

• The BLNS countries possess extremely limited trade policy space due to the SACU trade regime and South Africa's regional dominance. Their 'defensive' import options are restricted because they are locked into duty-free imports from South Africa and preferences under the TDCA and SADC.
• Trade liberalisation in South Africa poses a severe threat to the government revenues of Lesotho and Swaziland, which derive over half of their revenue from the SACU customs pool. A comprehensive FTA reducing tariffs by over 80% could reduce total government revenues by 42.5% for Lesotho and 45.6% for Swaziland.
• Simulations of a 'comprehensive FTA' show significant welfare gains for the 'rest of SACU' (Lesotho, Namibia, and Swaziland) estimated at $631 million, or 3.12% of aggregated GDP. This is primarily driven by a projected 160% increase in Swaziland's sugar exports to the EU following the removal of an 81% duty rate.
• The BLNS countries' 'offensive' export interests are primarily focused on the EU and the US. In the EU, they seek to preserve market access under Economic Partnership Agreements (EPAs), while in the US, they rely on the African Growth and Opportunity Act (AGOA), which is particularly vital for Lesotho's clothing exports.
• There is a significant asymmetry in industrial and competition policies within SACU. The BLNS countries lack their own functioning competition laws and often apply anti-dumping and safeguard measures imposed by South Africa, which may increase consumer prices in the BLNS without benefiting them.
• South Africa's dominance extends into the services sector of the BLNS countries. The author argues that because South African service providers may not be internationally competitive, the BLNS are locked into an uncompetitive services structure.

APA

Sandrey, R. (n.d.). IMPLICATIONS FOR THE BLNS COUNTRIES OF SOUTH AFRICAN TRADE POLICY REFORMS. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2008/04/dttp_pap_sandrey_blns_20071007.pdf

Chicago

Sandrey, Ron. IMPLICATIONS FOR THE BLNS COUNTRIES OF SOUTH AFRICAN TRADE POLICY REFORMS. South African Institute of International Affairs, n.d. https://saiia.org.za/wp-content/uploads/2008/04/dttp_pap_sandrey_blns_20071007.pdf.

Wikipedia

{{cite report |last1=Sandrey |first1=Ron |title=IMPLICATIONS FOR THE BLNS COUNTRIES OF SOUTH AFRICAN TRADE POLICY REFORMS |publisher=South African Institute of International Affairs |url=https://saiia.org.za/wp-content/uploads/2008/04/dttp_pap_sandrey_blns_20071007.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sandreyndimplications, author = {Sandrey, Ron}, title = {{IMPLICATIONS FOR THE BLNS COUNTRIES OF SOUTH AFRICAN TRADE POLICY REFORMS}}, institution = {South African Institute of International Affairs}, url = {https://saiia.org.za/wp-content/uploads/2008/04/dttp_pap_sandrey_blns_20071007.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }