The Impact of Non-tariff Barriers on Southern African Development Community: A firm base analysis of Botswana

Abstract

Mutual gains in international trade are based on the assumption of absence of trade restrictions among trading countries. As the World Trade Organization, regional integrations and trade agreements decrease tariffs throughout the world, other barriers to trade have tended to emerge to attain the same protectionist objectives previously achieved through tariffs. The main objective of this study was to investigate the impact of Non-Tariff Barriers (NTBs) on Botswana's trade within the Southern African Development Community region. In contrast with previous research, this study introduced infrastructure as a category of NTBs in the conceptualization of NTBs. In this study, 28 NTBs were categorised into four groups, namely, administrative, trade policy, technical and infrastructure. The findings made two major revelations: First, Administrative barriers were the most impactful, followed by Infrastructure, and then by Trade Policy; Technical NTBs were the least. Second, managers of smaller firms and less experienced firms perceived a higher level of NTBs. The findings suggest that studies in developing economies that omit infrastructure barriers may be misleading because of under-specification of an important trade barrier.  Since NTBs are external to firms and macro in scope, overcoming them requires collective action by the business sector. It is recommended that export promotion programmes should concentrate on small and less experienced firms because their managers have a tendency to overestimate the impact of NTBs.