Are prices sticky downwards? The effect of trade liberalisation on South Africa's wine industry

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Periodical article

Title:	Are prices sticky downwards? The effect of trade liberalisation on South Africa's wine industry
Authors:	Ntege, S. Ssekabira Harmse, C.
Year:	2003
Periodical:	South African Journal of Economics
Volume:	71
Issue:	4
Pages:	729-761
Language:	English
Geographic term:	South Africa
Subjects:	trade policy imports wine
External link:	https://onlinelibrary.wiley.com/doi/10.1111/j.1813-6982.2003.tb00094.x/pdf
Abstract:	Recent developments reveal a move away from blanket acceptance of the relationship between free trade and gains from trade. Against this background, the present paper empirically investigates the South African wine industry. One country's exports are another country's imports. However, an emphasis on the outward-oriented policy ignores its import aspect, and possibly exaggerates the benefits from free trade. The paper therefore investigates whether import prices are lowered when tariffs are reduced. The issue of income redistribution is also pursued. The reliability of the policy in achieving its goal, as well as the policy integration at micro-macro level, is touched upon as well. The paper concludes that opening up, in the instance of South Africa's wine industry, has proved inconsistent with what was the target: a more equitable distribution of income. Against expectations, prices of imported wine are sticky downwards. Bibliogr., ref. [ASC Leiden abstract]