Small African Economies in a More Uncertain Global Trade Environment : The Potential Impact of Post-AGOA Scenarios for Lesotho
This paper provides a forward-looking view of trade and its relevance for Lesotho’s medium- and long-term development. It does this through computable general equilibrium analysis of potential impacts based on specific trade-related scenarios. The...
| Main Authors: | , , , |
|---|---|
| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/516851558544501507/Small-African-Economies-in-a-More-Uncertain-Global-Trade-Environment-The-Potential-Impact-of-Post-AGOA-Scenarios-for-Lesotho http://hdl.handle.net/10986/31743 |
| Summary: | This paper provides a forward-looking
view of trade and its relevance for Lesotho’s medium- and
long-term development. It does this through computable
general equilibrium analysis of potential impacts based on
specific trade-related scenarios. The scenarios include the
potential loss of American Growth and Opportunities Act
preferences and preference erosion against competitors
through, for example, a United States–Vietnam Free Trade
Area. An immediate loss of American Growth and Opportunities
Act preferences would have a significant economic impact
that far exceeds that of a potential future United
States–Vietnam Free Trade Area. If these preferences were
suspended in 2018, Lesotho would face a loss of 1 percent in
income by 2020, relative to the baseline, and exports of
textiles and apparel would drop by 16 percent. The
computable general equilibrium simulations stress the need
to strengthen efforts to support structural transformation
leading to diversification of export products and markets,
improving backward and forward linkages, and lowering trade
costs. The simulations also indicate that trade facilitation
measures leading to an average decrease in trade costs of 2
percent per year would eliminate the negative consequences
of the loss of American Growth and Opportunities Act
preferences in terms of the loss of income. The changing
external environment is likely to offer new opportunities to
Lesotho's export industries in the medium term,
including through regional integration under the Continental
Free Trade Area. |
|---|