The Effects of Non-Tariff Measures on Agricultural Trade Efficiency of South Africa Within the SADC

Abstract

While tariff liberalization under regional trade agreements has progressed, non-tariff measures (NTMs) have emerged as a significant impediment to the realization of full trade potential, particularly in the agriculture sector where NTMs are especially prevalent and in the Southern African Development Community (SADC) where intra-regional trade is low. Despite the extensive available literature on this subject, the impact of NTMs on trade efficiency in the SADC has hardly been explored. Against this background, this study estimates the impact of NTMs on the efficiency of South Africa’s bilateral agricultural trade with 11 SADC member states using data from 2011 to 2022 and a stochastic frontier gravity model. The average efficiency is found to be 45.6 percent, implying that more than half of South Africa’s agricultural trade potential remains unrealized in the region due to inefficiencies. NTMs are found to be a source of inefficiency, the effect of which is larger than that of tariffs by a factor of 6. This result emphasizes an urgent need for harmonizing NTMs across SADC member states to reduce compliance costs which are associated with trade inefficiency. The study contributes to the literature by treating NTMs as man-made trade resistances that affect trade efficiency rather than trade volumes.

1. Introduction

The world has made remarkable progress in lowering tariffs since the onset of trade liberalization in the early 1980s. A key concern, however, is that while tariffs are significantly lower today than they were four decades ago, countries appear to have increasingly resorted to non-tariff measures (.). This concern is as true in the Southern African Development Community (SADC) as it is globally.

The SADC is a regional block comprising 16 member states (Angola, Botswana, Comoros, Democratic Republic of Congo, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Tanzania, Zambia, and Zimbabwe). Established in 1980 as the Southern African Development Coordination Conference (SADCC) and later transformed into the SADC in 1992, its primary mandate is to promote regional socio-economic cooperation and integration. Although significant progress has been made through various trade agreements to reduce tariffs, the region continues to face rising NTMs (Kalaba et al., 2016). In 2010, one product was, on average, subjected to 17 NTMs, which is high by global standards.

NTMs are broadly defined as policy instruments other than tariffs that can affect international trade. While many NTMs serve legitimate regulatory objectives such as protecting human, animal, and plant life, or ensuring product quality, they may also raise compliance, information, and procedural costs. As such, NTMs can distort trade, reverse the gains achieved through tariff liberalization, and hinder market access.

Despite the growing significance of NTMs, their impact on intra-regional trade in the SADC is yet to receive adequate empirical attention. Existing data show that intra-SADC trade has remained low, despite tariff reductions across the region. Currently, based on trade data, only about 19% of trade among SADC countries occurs within the bloc, an underwhelming figure for a market of approximately 407 million people.

Much of the recent literature, including Kalaba et al. (2016), has focused on qualitative and descriptive analyses of NTMs in the SADC, with limited empirical work quantifying their impact on bilateral trade. While these studies are valuable in documenting the evolution of regulatory practices, they fall short of enabling policymakers to determine whether NTMs are legitimate regulatory tools or disguised forms of protectionism.

To address this empirical gap, this study estimates the effect of NTMs on South Africa’s bilateral agricultural trade within the SADC region. The focus on South Africa and agriculture is justified for two reasons. First, South Africa is the largest and most diversified economy in the SADC region and serves as a major trading partner for nearly all member states. Second, agriculture remains a vital sector for food security, employment, and rural development across the region. Any form of trade friction in this sector can have widespread implications for regional development.

Traditional trade theory, anchored in the Ricardian and Heckscher–Ohlin frameworks, posits that trade patterns are determined by comparative advantage and relative factor endowments under the assumptions of perfect competition and a world with no trade frictions. In the main, these models predict welfare gains that arise when two countries trade with each other in a liberalized market. New trade theory and the gravity model framework have since evolved to incorporate real-world frictions such as transport costs and regulatory policies such as NTMs which may serve as NTBs.

In the context of agricultural trade, NTMs are understood as policy interventions that may either deliberately or unintentionally hinder trade flows. According to Beghin et al. (2015b), NTMs can be either trade-facilitating or trade-distorting, depending on their design and implementation. While some NTMs can enhance consumer safety and product quality and therefore promote trade in the long run, others may increase compliance costs that disproportionately burden exporters. These two possibilities make it difficult to a priori distinguish between legitimate regulatory objectives and implicit protectionism when evaluating the impact of NTMs on trade efficiency without undertaking a formal empirical analysis.

The gravity model of trade, derived from Newtonian physics and formalized by Anderson and Van Wincoop (2003) has provided a natural starting theoretical point in studies seeking to link NTMs with trade performance. An attractive feature of this theoretical framework is its ability to account for trade frictions which traditional models overlook. In its original form, however, it assumes full efficiency so that deviations from the frontier trade volumes reflect random shocks on bilateral trade. To improve on this weakness, this study extents the traditional gravity model by accounting for trade inefficiencies within the auspices of a stochastic frontier model. This makes the traditional gravity model a stochastic gravity frontier model

To capture the theoretical underpinnings of trade inefficiency and how NTMs relate with trade inefficiency, this study draws insights from the Melitz (2003) model. In the Melitz (2003) model, only the most productive exporters are able to overcome the fixed and variable costs of exporting. NTMs such as sanitary and phytosanitary standards, labelling requirements, and customs procedures act as additional fixed and variable trade costs which fall broadly under compliance costs. These costs disproportionately deter less productive firms from entering foreign markets, thus altering both the intensive and extensive margins of trade. Consequently, even when trade flows occur, they may fall well short of their potential, particularly when such measures are non-harmonized and costly to comply with.

Empirically, studies have increasingly shifted attention from tariffs to NTMs as major obstacles to trade, particularly in developing regions where formal tariff levels have declined under trade agreements. The evidence is largely inconclusive on the relationship between NTMs and bilateral trade flows (Santeramo & Lamonaca, 2019; Mnondwa et al., 2024; Gelan & Omore, 2014; Turkson et al., 2023). On the one hand, some studies, such as Liu et al. (2019) and Choi et al. (2025), find NTMs detrimental on agricultural trade by imposing additional compliance costs and creating trade barriers. Disdier and Fontagné (2010) specifically provide robust cross-country evidence that NTMs, especially SPS measures and technical barriers to trade (TBTs), significantly reduce trade flows, especially in agriculture. Similarly, in the African context, Carrère and de Melo (2011a) find that NTMs act as significant trade-reducing factors due to poor regulatory harmonization and limited administrative capacity as also observed in Mold and Mukwaya (2016). Additionally argued in these studies is that the burden of NTMs is compounded by weak enforcement institutions, information asymmetries, and high compliance costs (Dhingra et al., 2023; Vakulchuk & Knobel, 2018).

In contrast, others, including Chen et al. (2008) and Crivelli and Gröschl (2016), find that NTMs—particularly SPS—enhance trade by improving product quality. This conflicting evidence makes it difficult for policymakers to draw conclusive policy inferences. It also underscores the need for further empirical inquiry into the effects of NTMs, especially within regional blocks such as SADC where the evidence is scanty and in sectors such as agriculture where NTMs are particularly prevalent.

Within this contradictory literature, some empirical gaps remain. First, there is a dearth of literature focusing specifically on the SADC. This is despite the fact that the SADC has historically recorded low intra-regional trade on the back of rising NTMs. Second is the limited attention given to how NTMs affect trade efficiency, as most studies have largely concentrated on average trade volumes. While understanding average trade volume is valuable, assessing trade efficiency is crucial for regions where regulatory inefficiencies may limit the ability of exporters to trade at full potential. Lastly, there is a scarcity of studies that differentiate trade costs into natural and man-made categories, where man-made costs typically include NTMs. This distinction is essential as it allows for a better understanding of the underlying mechanisms through which NTMs may affect trade efficiency.

This study contributes to the empirical literature on NTMs and trade in two ways. First, it is among the first and possibly the only empirical study to explicitly link NTMs with agricultural trade efficiency in the SADC. Here, trade inefficiency is conceptualized as the gap between actual and potential trade flows, acknowledging concerns that SADC member states may not be trading at full potential. Second, the study departs from the conventional gravity model by disentangling natural and man-made trade costs. While natural trade barriers such as geographic distance are expected to reduce trade volumes through higher transport costs, man-made trade barriers captured by NTMs are hypothesized to restrict the ability of member states to realize their full trade potential by raising compliance costs. This conceptual distinction is crucial to the extent that it provides a clearer understanding of the specific mechanisms through which NTMs operate.

From a policy perspective, this study is important for at least three reasons. First, as argued by the UN, understanding the implications of NTMs is essential for the formulation of effective development strategies to meet the Sustainable Development Goals. Second, NTMs are considered a major impediment to intra-regional trade in the SADC. Their elimination is a priority under several SADC strategic documents such as the SADC Regional Indicative Strategic Plan (RISDP), the SADC Industrialization Strategy and Roadmap (SISR), and the SADC Trade Facilitation Programme (TFP). Third, if NTMs are empirically shown to be detrimental, their removal could enhance market access, create employment opportunities and promote competitiveness within the region.

The main results of the study underscore the critical role of NTMs in constraining the efficiency of South Africa’s agricultural trade with SADC member states. The average trade efficiency is estimated at 0.456, implying that actual trade flows realize only 45.6 percent of their potential level while the remaining 54.4 percent is lost due to inefficiencies. Among the inefficiency determinants, NTMs are found to statistically significantly increase trade inefficiency. Importantly, the effect of NTMs on trade inefficiency is found to surpass that of conventional tariff barriers by a factor of 6, suggesting that the former now represent the dominant form of trade restriction in the region. These results imply that NTMs are a binding constraint on agricultural trade efficiency even in a context where tariffs have already been substantially liberalized under SADC trade protocols.

The rest of the study is organized as follows. Section 2 presents theoretical and empirical literature. Section 3 presents the methodological framework of the study. Section 4 presents and interprets empirical results. Section 5 discusses the key findings in relation to the existing literature. Section 6 presents the limitations of the study while Section 7 concludes, provides policy recommendations and suggests areas for further study.

2. Literature Review

NTMs have become increasingly salient in contemporary trade policy, especially as traditional tariff barriers have declined through successive rounds of liberalization. Unlike tariffs, NTMs often operate through less transparent and more institutionally complex channels, and their implications for trade efficiency are far from straightforward. This section reviews the key theoretical and empirical insights that inform the analysis of NTMs and trade efficiency in the SADC.

2.1. Theoretical Framework

From a theoretical perspective, the relationship between NTMs and trade efficiency can be situated within several theoretical traditions in international trade and institutional economics. These frameworks differ in how they conceptualize NTMs as either efficiency-enhancing instruments or sources of distortion depending on the regulatory context, intent, and implementation capacity.

At a basic level, NTMs represent frictions that interfere with the smooth functioning of international markets. In standard neoclassical trade models, these frictions manifest as distortions that prevent prices from reflecting the true opportunity cost of resources. But such models often understate the policy and institutional origins of NTMs. Many NTMs arise not from attempts to correct market failures, but rather from the interplay of domestic political incentives and institutional capacity constraints. In this sense, NTMs are not merely second-best instruments, they are often the outcome of non-economic objectives embedded in the political economy of regulation.

Similar to the above theoretical exposition, NTMs are treated as trade costs that create deviations from Pareto-efficient outcomes in classical trade theories. They function similarly to tariffs by increasing import prices and reducing trade volumes, thus distorting the allocation of resources and hindering comparative advantage. Through this lens, NTMs are inherently efficiency-reducing unless offset by clear market failures.

One of the leading theories, Krugman’s model of monopolistic competition and subsequent extensions, suggest that NTMs can affect trade by limiting market access in industries characterized by increasing returns to scale and differentiated products. NTMs may impede the exploitation of scale economies and restrict consumer variety, leading to static inefficiency. However, when used to enforce standards, they may also correct for quality uncertainty in international markets. Others, such as North (1990) and Rodrik (2000) theoretically view NTMs as policy tools embedded within the institutional fabric of the state, with effects on trade efficiency depending on regulatory quality. In cases where regulatory capacity is high, NTMs may enhance efficiency by addressing information asymmetries, externalities, and coordination failures. On the contrary, in contexts of weak governance or rent-seeking, NTMs often become tools for discretionary control and barriers to entry, thus reducing trade efficiency.

Another theory linking NTMs and trade efficiency is the political economy of protectionism. According to Grossman and Helpman (1994), NTMs can be endogenous outcomes of political bargaining between interest groups and policymakers. In this framework, NTMs are likely to reflect the preferences of organized domestic producers rather than efficiency criteria, especially when tariffs are constrained by trade agreements. This theory explains the persistence of inefficient NTMs in democracies and developing economies.

In this study, the impact of NTMs on trade efficiency is grounded in the gravity model of international trade popularized by Anderson (1979). The gravity equation makes bilateral trade flows ($T$) dependent upon the product of the incomes ($Y$) of the two partner countries $i$ and $j$, divided by the distance separating them ($D$):

$$T_{ij}=A{\displaystyle \frac{Y_i^{{\beta }_1}{Y}_j^{{\beta }_2} }{D_{ij}^{{\beta }_3}}}$$

(1)

where $A$, ${\beta }_1$, ${\beta }_2$ and ${\beta }_3$ are unknown parameters to be estimated. A crucial part of this model is the introduction of trade costs. In its original form, bilateral trade costs are proxied by the distance between trading partners. Other scholars have, however, extended these proxies to include dummy variables capturing common borders and common languages under the assumption that trading partners sharing a common border and language have lower trade costs, which therefore facilitates trade. In this study, following Anderson and Van Wincoop’s (2003), we treat NTMs as iceberg trade costs that reduce bilateral trade efficiency. We particularly assume that natural trade barriers such as distance and the sharing of a common border and language affect the trade frontier while man-made trade resistances such as tariffs and NTMs affect the ability of trading partners to reach that trade frontier. With this extension, Equation (1) can be modified as follows:

$$T_{ij}=A{\displaystyle \frac{Y_i^{{\beta }_1}{Y}_j^{{\beta }_2} }{D_{ij}^{{\beta }_3}}}\times \exp (v_{ij}-u_{ij})$$

(2)

where $v_{ij}$ captures deviations of trade flows from their maximum possible level due to random shocks beyond the control of the trading partners while $u_{ij}$ captures systematic deviations from the maximum possible level due to trade costs imposed by tariffs and NTMs. Introducing logarithms to linearize the specification leads to the following equation:

$$\ln T_{ij}=A+{\beta }_1{Y}_i+{\beta }_2{Y}_j-{\beta }_3{D}_{ij}+{\beta }_4{L}_{ij}+{\beta }_5{B}_{ij}+v_{ij}-u_{ij}$$

(3)

where $L$ and $B$ are dummies capturing common language and border, respectively, and ${\beta }_4$ and ${\beta }_5$ are their corresponding parameters to be estimated. Since we assume that systematic deviations of actual trade flows reflect trade costs arising from tariffs and NTMs, we can specify the following equation:

$$u_{ij}={\delta }_0+{\delta }_1{NTMs}_{ij}+{\delta }_2{TRFs}_{ij}+{ϵ}_{ij}$$

(4)

where $NTMs$ and $TRFs$ are bilateral trade costs imposed by NTMs and tariffs, respectively, ${\delta }_0,\dots , {\delta }_2$ are unknown parameters to be estimated and $ϵ$ is a normal error term. As the specification suggests, we hypothesise that bilateral trade costs imposed by NTMs and tariffs increase bilateral trade inefficiencies. In line with the empirical literature reviewed in the subsequent section, we also expect NTMs to have a more detrimental effect on bilateral trade than tariff measures. This hypothesis is justified on several grounds. The first justification can be drawn through the lens of the Melitz (2003) model and the political economy of protectionism (Grossman & Helpman, 1994). Unlike tariffs, which are transparent and predictable trade costs imposed at the border, NTMs often manifest as regulatory compliance costs that affect both the intensive and extensive margins of trade. In the Melitz (2003) model, NTMs such as labelling requirements and technical standards introduce fixed and/or variable costs that disproportionately deter less productive firms from entering export markets, which ultimately reduces the number of firms that can profitably participate in trade. Additionally, NTMs may act as implicit barriers that are less transparent and more administratively complex which, unlike tariffs which are predictable, generate uncertainty and increase compliance costs (North, 1990; Rodrik, 2000). From the political economy perspective, NTMs may also emerge as endogenous protectionist tools that respond to domestic lobbying pressures, thus representing aggressive policy instruments that are both more difficult to monitor and more elastic in their application compared to tariffs. Viewed this way, NTMs can generate higher trade inefficiencies than tariffs by not only raising costs but also discouraging market entry and facilitating an inefficient allocation of resources due to their relatively high level of uncertainty and administrative complexities.

2.2. Empirical Literature

A growing body of empirical work has sought to estimate the impact of NTMs on trade efficiency with findings that have been often as context-specific as they are policy-relevant.

Fatma and Bharti (2024) underscore a critical yet underexplored determinant of NTM effectiveness: domestic capabilities. Their two-stage approach to Indian exports to ASEAN reveals that the trade impact of technical NTMs is not just a function of the regulations themselves, but of the institutional and infrastructural environments within which they are implemented. More importantly, they find that the governance and logistics capabilities of the importing ASEAN countries are more influential than those of the exporter, India. This asymmetry suggests that the locus of adjustment costs and thus the real constraint to trade may lie more with the regulatory and absorptive capacities of destination markets than with exporters per se.

In a broader continental setting, Beckman et al. (2024) examine the African Continental Free Trade Area (AfCFTA), focusing on agricultural trade. Their general equilibrium analysis reveals a striking result: reductions in NTMs generate greater intra-African trade gains than tariff cuts alone. This finding upends conventional policy priorities in African trade integration, which have long been dominated by tariff liberalization. The implication is clear—NTMs are now the new frontier of trade policy, but they are not just barriers; they are levers.

This dual character of NTMs as both impediments and facilitators of trade is further illuminated in the work of Ridley et al. (2024). Analyzing the global meat trade, they show that while tariffs predictably depress trade volumes, technical NTMs such as SPS and TBTs can actually expand trade. Their structural gravity model suggests that the recent proliferation of NTMs contributed more to trade expansion than the cumulative tariff reductions over the same period. Here, NTMs are not merely instruments of restriction but vehicles of trust, enabling trade in sensitive and high-stakes sectors such as food.

However, this standards-as-catalysts hypothesis does not hold uniformly across production structures. Eum (2023) examines NTMs in ASEAN through the lens of global value chains (GVCs). The results show that while SPS and TBT measures can be trade-enhancing, their positive effects diminish for exporters engaged in forward and upstream GVC activities. These segments require high technological input and skilled labor, which heighten compliance costs. Thus, NTMs impose a disproportionate burden on precisely those sectors where industrial upgrading is most urgent—a structural contradiction that deserves policy attention.

Ngoc et al. (2024) add another layer of heterogeneity by focusing on Vietnam’s agricultural imports. Their study distinguishes between least developed countries (LDCs) and non-LDCs, finding that simple NTMs (e.g., labelling) can facilitate imports from LDCs, while more complex TBTs and SPS measures tend to exclude them. Deep trade agreements can mitigate these effects—but only for non-LDCs. This suggests that multilateralism, far from being a leveler, may reproduce asymmetries in trade access unless designed with capacity disparities in mind.

Regionally, the SADC literature presents a sobering picture. Kalaba et al. (2016) document the increasing use of NTMs in the SADC, noting that these measures have effectively replaced tariffs as the primary constraint on trade. With an average of 17 NTMs per agricultural product in 2010, the region’s trade landscape has become increasingly opaque and fragmented. The authors warn that without transparency and harmonization, NTMs could unravel the modest gains of regional trade liberalization.

Echoing these concerns, Soontiens (2003) reports on the lived experiences of South African exporters, who face a maze of NTMs, some visible, others insidious. These include not only regulatory barriers but also shifting administrative procedures and political uncertainties, which undermine predictability. The paper implicitly argues that NTMs, particularly in the South, are not just technical hurdles but manifestations of deeper institutional fragilities.

Within the literature, one of the important findings reported by several studies is that NTMs often have a larger negative effect on trade than traditional tariffs. A joint report by the United Nations Conference on Trade and Development (UNCTAD-World Bank Report, 2017) and the World Bank revealed for instance that NTMs impact 77% of global trade and are more significant than tariffs in trade policy. In agriculture, for instance, NTBs are found to have an average effect equivalent to a 21% tariff. The study also found that NTBs impose a 3 percentage-point higher cost for low-income countries compared to tariffs. This result is similarly echoed by Kinzius et al. (2019) whose findings indicate that NTMs, such as import controls and technical barriers, have a more negative effect on trade than traditional trade barriers. More recently, Ranjan and Edirisinghe (2020) revealed that a 1% increase in regulatory stringency in Sri Lanka led to a 0.67% decrease in tea exports, whereas a 1% increase in tariffs resulted in only a 0.03% decline. Muradovna (2020) found that tariff barriers reduce trade by 0.014% compared to the 2.986% of NTMs. This confirms the result that NTMs have a significantly larger negative impact on trade than tariffs.

A common modelling approach employed in these studies (Doan & Xing, 2018; Sewe & Kimunio, 2023; Romyen et al., 2023) is the stochastic gravity trade model modified to incorporate the effect of NTMs. In Sewe and Kimunio (2023), results from the stochastic gravity model confirmed that the imposition of NTMs has a detrimental impact on bilateral trade. In particular, a percentage increase in NTMs is associated with a 34.3 percent decrease in the Intra-Common Market for Eastern and Southern Africa bilateral imports. The current study adopts this stochastic gravity frontier model of international trade in the context of the SADC, a region that has received limited empirical attention.

The SADC has made significant strides in reducing tariffs among member states since the early 2000s. However, the anticipated surge in intra-regional trade has not materialized as expected. A primary factor impeding this growth is the prevalence of NTMs, which encompass a range of regulatory and procedural barriers beyond traditional tariffs. These include SPS measures, TBTs, customs delays, import licensing requirements, and various administrative procedures. The regional body has acknowledged the challenges posed by NTMs and has implemented several initiatives aimed at their reduction. The SADC Protocol on Trade mandates member states to eliminate existing NTMs and refrain from introducing new ones. To facilitate this, mechanisms such as the online Non-Tariff Barrier (NTB) Monitoring System have been established, allowing stakeholders to report and address NTBs in real time. Additionally, the SADC has undertaken efforts to harmonize SPS measures and technical standards, promoting mutual recognition among member states.

Despite these policy measures, several challenges persist. Data collection on NTMs remains incomplete, hindering comprehensive analysis and targeted interventions. Furthermore, the resolution process for reported NTBs is often protracted, with many complaints remaining unaddressed for extended periods. Infrastructure deficits, such as inadequate transport networks and inefficient border facilities, exacerbate the impact of NTMs, leading to increased transaction costs and delays. Moreover, overlapping memberships in multiple regional economic communities introduce complexities in policy harmonization and implementation. For instance, several SADC member states are also part of the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC). Zambia, for example, is a member of both the SADC and COMESA, each with its own set of trade regulations, rules of origin, and NTB reporting systems. This dual membership creates regulatory inconsistencies, as exporters must navigate varying SPS requirements, customs documentation, and trade facilitation protocols. The resulting administrative burdens increase transaction costs and delay shipments, undermining the objectives of trade liberalization. Harmonizing these frameworks remains a significant policy challenge, particularly given the differing economic priorities and institutional capacities of member states.

2.3. Empirical Gap

Despite the substantial body of literature on NTMs and trade, several empirical gaps remain unaddressed within the context of the SADC. First, much of the existing work on NTMs in the SADC is predominantly qualitative or descriptive (Kalaba et al., 2016; Soontiens, 2003), with limited quantitative analysis that explicitly assesses the effect of NTMs on bilateral trade efficiency. While studies such as Kalaba et al. (2016) provide critical insights into the proliferation of NTMs, they do not quantify the extent to which NTMs impede or facilitate trade within the SADC. Thus, the literature lacks empirical evidence on whether NTMs in the SADC act as legitimate regulatory measures or as an implicit form of protectionism.

Second, existing empirical studies in the SADC and Africa in general that assess the impact of NTMs on trade primarily focus on trade volumes rather than trade efficiency (Beckman et al., 2024; Santeramo & Lamonaca, 2019). While these studies provide valuable evidence on the aggregate trade effects of NTMs, they do not account for the extent to which actual trade flows deviate from potential trade flows due to NTMs. Given that NTMs can introduce additional compliance costs, particularly in sectors such as agriculture where standards and regulations are pervasive, a focus on trade efficiency rather than trade volumes is necessary to understand the full impact of NTMs in the SADC.

Third, there is limited empirical work that distinguishes between natural and man-made trade costs in the context of the SADC. In this study, natural trade costs particularly include costs arising from transportation as captured by distance between trading partners, the sharing of a common border and use of a common language. Man-made costs are those reflecting deliberate attempts to influence trade outcomes and they include tariffs and NTMs.

Addressing these empirical gaps, the current study employs a stochastic gravity frontier model that explicitly distinguishes between natural and man-made trade costs in the specification to estimate the effect of NTMs on South Africa’s bilateral agricultural trade efficiency within the SADC. Natural trade costs are assumed to influence the maximum possible trade volumes between South Africa and its SADC trading partners while tariff and non-tariff costs are assumed to influence the ability of South Africa to trade at its full potential.

3. Materials and Methods

3.1. Model Specification

This study’s empirical model builds on the structural gravity model of Anderson (1979) and Anderson and Van Wincoop (2003). In line with the theoretical model provided in Section 2.1, the baseline empirical equation is specified as follows:

$$\ln T_{ij,t}={\delta }_0+{\delta }_1\ln Y_{i,t}+{\delta }_2\ln Y_{j,t}-{\delta }_3{Dist}_{ij}+{\delta }_4{Lang}_{ij}+{\delta }_5{Bord}_{ij}+{\epsilon }_{ij,t}$$

(5)

where ln denotes the natural logarithm, $T_{ij,t}$ is the total agricultural trade (exports and imports) between South Africa and trading partner j at time t, and $Y_{i,t}$, $Y_{j,t}$ are the GDPs of South Africa and its partner, respectively. The variable ${Dist}_{ij}$ captures the geographical distance between Pretoria and the trading partner’s capital city, representing natural trade costs. Dummy variables ${Lang}_{ij}$ and ${Bord}_{ij}$ take the value of 1 if South Africa shares a common official language or a border with the trading partner, respectively, and ${\delta }_0,\dots ,{\delta }_5$ are unknown parameters to be estimated.

A key contribution of this paper is the explicit decomposition of trade costs into natural and man-made components as alluded to in Section 2. The proposition raised here is that while distance reflects natural trade resistance in gravity trade literature, man-made trade barriers such as NTMs may prevent countries from trading at their full potential through raising compliance costs. To model this proposition, the composite error term ${\epsilon }_{ij,t}$ is decomposed following the stochastic frontier literature as follows:

$${\epsilon }_{ij,t}=v_{ij,t}-u_{ij,t}$$

where $v_{ij,t}~N(0,{\sigma }_v^2)$ captures symmetric random agricultural trade shocks, and $u_{ij,t}\ge 0$ reflects trade inefficiency attributed to man-made barriers. The inefficiency term is then modeled as the following:

$$u_{ij,t}=z_{ij,t}^{\prime }\theta$$

(6)

with $z_{ij,t}$ representing a vector of trade-restricting variables, namely NTMs and tariffs, and $\theta$ being a vector of unknown parameters to be estimated. This decomposition has been similarly applied in several studies such as Atif et al. (2017), Ebaidalla and Ali (2023) and more recently Bakouan (2025).

3.2. Marginal Effects

In the stochastic gravity frontier model of international trade, the relationship between tariffs and NTMs and the inefficiency term is inherently non-linear due to the composite error structure which comprises both the random noise and the inefficiency component. As a result, the estimated coefficients in the inefficiency equation do not directly indicate the marginal effects of the covariates on inefficiency. Instead, the marginal effects must be computed to account for the interaction between each covariate and the distributional assumptions of the inefficiency term. This is particularly important since the conditional inefficiency term is derived from a non-linear function involving probability density and cumulative distribution functions. Against this background, we computed the marginal effects post-estimation following the derivation proposed by Wang (2002).

$${\displaystyle \frac{\partial E\left(u_i\right)}{\partial z\left[k\right]}}=\delta \left[k\right]\left[1-{\Lambda }_i\left[{\displaystyle \frac{\varphi \left({\Lambda }_i\right)}{\Phi \left({\Lambda }_i\right)}}\right]-{\left[{\displaystyle \frac{\varphi \left({\Lambda }_i\right)}{\Phi \left({\Lambda }_i\right)}}\right]}^2+w\left[k\right]{\displaystyle \frac{{\sigma }_{u,i}}{2}}\left(1+{\Lambda }_i^2\right)\left[{\displaystyle \frac{\varphi \left({\Lambda }_i\right)}{\Phi \left({\Lambda }_i\right)}}\right]+{\Lambda }_i{\left[{\displaystyle \frac{\varphi \left({\Lambda }_i\right)}{\Phi \left({\Lambda }_i\right)}}\right]}^2\right]$$

(7)

where $z$ is a vector of variables affecting trade efficiency (i.e., costs arising from tariff and NTMs), ${\Lambda }_i={\displaystyle \raisebox{1ex}{$u_i$}\!\left/ \!\raisebox{-1ex}{${\sigma }_{u,i}$}\right.}$ and $\delta \left[k\right]$ and $w\left[k\right]$ are the corresponding coefficients. Wang (2002) demonstrates that the marginal effect of a $z$ variable on trade inefficiency is nonmonotonic, implying that the impact depends on exogenous values and may vary across observations. It is therefore necessary to compute observation-specific marginal effects and summarize to observe the average impact of tariff and NTMs.

3.3. Data, Variables and Expected Signs

The expected signs of the variables in the gravity model are grounded in both trade theory and the empirical literature. The GDPs of South Africa and its trading partners are expected to have a positive effect on bilateral agricultural trade, as larger economies typically have more production capacity and a higher demand for imports (Nguyen, 2022). Distance is anticipated to exert a negative influence, reflecting higher transportation and transaction costs that discourage trade (Romyen et al., 2023). Similarly, the presence of a common language and a shared border are expected to facilitate trade and thus have positive coefficients, as they reduce informational and logistical barriers (Saxena et al., 2024). In the inefficiency equation, non-tariff measures and tariffs are hypothesized to increase trade inefficiency (Khati & Kim, 2022). These man-made barriers hinder the ability of SADC member states to trade with South Africa at their full potential by raising compliance costs.

The study employs a panel of bilateral agricultural trade data between South Africa and its SADC trading partners, with key variables drawn primarily from the World Development Indicators (WDI) and the International Monetary Fund (IMF) databases. While the SADC comprises 16 member states, this study only uses 11 member states (Botswana, Madagascar, Mozambique, Mauritius, Malawi, Namibia, Seychelles, Tanzania, Democractic Republic of Congo, Zambia & Zimbabwe). The remaining trading partners are omitted due to missing data. The dependent variable is the total value of agricultural trade (exports plus imports) between South Africa and each SADC country. Bilateral trade data were compiled from the IMF’s Direction of Trade Statistics (DOTS).

The main explanatory variables in the gravity equation include the GDP of South Africa and its trading partners, both of which are obtained from the WDI. The distance variable, representing the geographical distance between Pretoria and the capital cities of SADC member states, is sourced from the CEPII database and serves as a proxy for natural trade costs. Dummy variables for common language and shared border take the value of one if South Africa shares an official language or land border with the partner country, respectively. These variables are based on geographic and linguistic data from CEPII and World Bank regional classifications.

In the inefficiency equation, the study includes two variables capturing trade costs arising from tariffs and NTMs. Rather than focusing on specific NTMs such as sanitary and phytosanitary measures, technical barriers to trade, or import/export licenses, the study employs aggregate trade cost data derived from the Economic and Social Commission for Asia and the Pacific (ESCAP)-World Bank trade cost database. This approach offers several advantages. First, using trade costs as a variable captures the overall economic impact of NTMs rather than using specific measures. While notifications of NTBs or SPS measures indicate the presence of regulatory restrictions, for instance, they do not provide direct information on the cost implications of these barriers for traders. In contrast, trade costs data, measured in ad valorem terms, quantify the actual economic burden imposed by NTMs, thus allowing for a better assessment of their impact on trade flows (Chen & Novy, 2012). In addition, this methodology facilitates a direct comparison of the relative costs associated with tariffs and NTMs (Anderson & Van Wincoop, 2004). The analysis was performed using Stata 17.

3.4. Estimation Strategy and Diagnostics

Equations (5) and (6) are simultaneously estimated using Greene’s (2005) true-random stochastic frontier approach. The attractive feature of this approach over its competing alternatives is its ability to disentangle inefficiency from unobserved heterogeneity. The simultaneous estimation of both equations acknowledges the bias that arises if the two-step equations are estimated in a stepwise fashion (Wang & Schmidt, 2002). For robustness purposes, the study uses the maximum likelihood instrumental variable approach proposed recently in Karakaplan (2022). This procedure has the advantage of handling endogeneity in stochastic frontier gravity specification given that trade inefficiencies might also influence the imposition of NTMs. In addition, the marginal effects in the inefficiency specification could be biased if NTMs and trade inefficiency are jointly affected by omitted variables. Most importantly, costs arising from tariff and NTMs could be measured with error, which may lead to attenuation bias in which the marginal effects in the trade inefficiency specification will be biased towards zero. Within the Karakaplan (2022) model, contemporaneous values of NTMs and tariff costs are instrumented using their lagged values. Validity of these instruments is assessed post-estimation using a Hansen-type test proposed by Karakaplan (2022).

To test the suitability of the cost frontier model with inefficiencies over a standard regression model with normal stochastic errors, we perform Schmidt and Lin’s (1984) OLS residual check and the Likelihood Ratio (LR) test. The OLS residual check is a pre- and informal test of the model before the maximum likelihood estimation. The logic behind the residual check is that the composite error term ${\epsilon }_{ij,t}=v_{ij,t}-u_{ij,t},$ hence the OLS residuals should have a negative skewness. This approach is however only useful as a screening device since it does not use the information from the distribution function of the stochastic error. The approach which uses information from the distribution of the stochastic error is a likelihood ratio (LR) test. The LR test is therefore additionally conducted with two degrees of freedom that represent two restrictions (${\sigma }_u^{2 }$= 0 and $u=0$) associated with a truncated normal distribution (Kumbhakar et al., 2015). The LR test takes the following form.

$$LR\_statistic =-2\left[L\right(H_o)-L(H_a\left)\right]$$

where $L\left(H_o\right)$ and $L\left(H_a\right)$ represent the log-likelihood values computed from a restricted linear regression model and the unrestricted production frontier model, respectively, with two degrees of freedom. Critical values for the mixed distribution are obtained from Kodde and Palm (1986). If the null hypothesis of no inefficiency is not rejected, then the cost frontier will reduce to a cost function estimable by Ordinary Least Squares (OLS) with normal errors.

4. Results

This section presents the estimation results from the stochastic frontier gravity model, which decomposes total agricultural trade between South Africa and its SADC trading partners into potential trade (the frontier) and trade inefficiency. The model is estimated using panel data, where South Africa is the exporting country, and 11 SADC member states are the importers. The dependent variable is the total bilateral agricultural trade value. Robust standard errors are used to guide against potential heteroscedasticity. The results are presented in two tables.

Table 1. NTMs and agricultural trade efficiency in the SADC.

Variable	Coefficient	Robust Standard Error	z-Stat	95% Confidence	95% Confidence
Frontier model
loggdp (South Africa)	0.309	1.020	0.30	−1.690	2.309
loggdp (Importer)	0.116 *	0.068	1.71	−0.017	0.249
distance_km	−0.0004 ***	0.0001	−6.49	−0.001	−0.0003
common_border	0.646 ***	0.184	3.51	0.285	1.007
common_language	0.427 **	0.167	2.56	0.100	0.755
_cons	7.495	28.689	0.26	−48.722	63.712
Inefficiency model
log non-tariff costs	0.708 ***	0.198	3.56	0.319	1.098
log tariff costs	0.113 ***	0.033	3.41	0.048	0.179
_cons	−2.637	0.794	−3.32	−4.194	−1.080
Usigma
_cons	−2.888	0.309	−9.33	−3.494	−2.281
Vsigma
_cons	−6.335	2.026	−3.13	−10.307	−2.364
Theta
_cons	0.327	0.020	15.69	0.286	0.368
Sigma_u	0.235	0.036	6.46	0.174	0.319
Sigma_v	0.042	0.042	0.99	0.005	0.306
Lambda	5.605	0.055	100.55	5.496	5.715
Mean efficiency	0.456

*, **, *** denote significant at 10%, 5% and 1%, respectively.

presents the estimated baseline regression containing the frontier model and the inefficiency specification.

Table 2. Marginal effects of tariffs and NTMs.

Variable	Obs	Mean	Std. Deviation	Min	Max
log non-tariff costs	132	0.6655464	0.0820124	0.3397583	0.7088733
log tariff costs	132	0.1070171	0.0131873	0.0546317	0.1139839

presents the unconditional marginal effects of tariffs and NTMs on trade inefficiency since the coefficients in Table 1 are conditional on the stochastic error term.

The coefficients from the frontier estimation are largely consistent with theoretical expectations derived from the structural gravity model. The coefficient on the logarithm of bilateral distance is negative and statistically significant at the 1% level, confirming that potential trade volumes between South Africa and its SADC partners decrease with distance. This result reinforces the traditional gravity model’s prediction that distant trading partners trade less due to high transport costs and information asymmetries, which are particularly binding in agricultural markets. Empirically, this result is in line with Abbas, Abbas et al. (2025) and Muradovna (2020) who similarly found negative coefficients of −0.717 and −0.774, respectively.

Economic mass variables exhibit the expected positive signs, although it is only the importer’s mass variable that turns out to be statistically significant. The positive and statistical significance of the importer’s mass variable indicates that potential agricultural trade volumes increase with GDP of South Africa’s trading partners in the SADC. This is consistent with the gravity model and the empirical literature, including Azu et al. (2024), in which the importer’s GDP serves as a demand-side variable that stimulates bilateral trade volumes. The insignificance of South Africa’s GDP, proxying the supply side, may be explained by South Africa’s weak economic growth during the sampling period which may not have been strong enough to adequately serve its regional markets. It is well documented that the South African economy has grown by little more than 1% annually in the last decade (Etim & Daramola, 2020). The experience of China between 1980 and 2015 further demonstrates the importance of robust domestic growth in order to serve foreign markets.

Dummy variables capturing bilateral frictions and affinities yield statistically significant coefficients. The shared border dummy is positive and significant suggesting that agricultural trade volumes are higher between South Africa and SADC members that it shares a common border with (such as Lesotho, Swaziland, Zimbabwe, Mozambique and Botswana). This is consistent with the gravity literature in which neighbors trade more with each other due to lower transaction and logistics costs. The coefficient observed in Table 1 of 0.646 is not significantly far from the 0.476 reported in Abbas et al. (2025). The common official language is similarly associated with a higher trade potential. In the literature, this is largely attributed to reduced communication barriers and improved coordination.

The inefficiency component of the model captures the extent to which actual trade falls short of its potential due to structural and policy-related frictions. The estimated average trade efficiency score across the sample is 0.456, indicating that, on average, South Africa realizes only 45.6% of its potential agricultural trade with SADC member states. Put differently, there exists a 54.4% efficiency gap, suggesting that more than half of the potential trade is lost due to inefficiencies. This result is consistent with policy concerns raised in several SADC documents that intra-SADC trade in agricultural goods is considerably low. To understand some of the sources of these inefficiencies, tariff- and NTM-induced trade costs were included in the inefficiency specification as regressors. A positive coefficient in this specification indicates that the corresponding variable increases trade inefficiency.

The coefficient on the logarithm of tariff costs is positive and statistically significant, suggesting that higher applied tariffs by SADC partners facilitate trade inefficiency. This result is consistent with theoretical predictions, as tariffs raise the effective cost of imports, thereby distorting market signals and discouraging efficient trade flows. This result is interesting as it confirms that even within a preferential trade arrangement such as the SADC, remaining tariff barriers can contribute significantly to trade distortions and unrealized trade potential.

More interesting is that the coefficient on non-tariff measures is also positive, sizeable and highly significant, indicating that NTMs constitute a major source of inefficiency in South Africa’s agricultural trade within the SADC. Recall that Table 2 is not presenting mere descriptive statistics but rather a summary of observation-specific marginal effects computed post-estimation. According to Table 2, a 1% increase in NTM-induced trade costs is associated with a 0.67% increase in trade inefficiency. This result aligns with empirical evidence from other regional blocs showing that NTMs often impose higher compliance costs compared to tariffs, especially in agricultural trade where sanitary, phytosanitary, and technical regulations are prevalent. The magnitude of the coefficient (0.67%) suggests that NTMs are quantitatively more restrictive than tariff barriers (0.11%) in the SADC context, pointing to the need for regulatory harmonization and institutional reforms to reduce trade costs arising from NTMs. This result is consistent with a priori expectations raised earlier in the theoretical framework, given the relatively complex and uncertain nature of NTMs compared to tariffs. The result is additionally in line with previous studies including Muradovna (2020) who found NTMs more detrimental on bilateral trade than tariffs.

The estimated lambda parameter is above 1 and statistically significant, indicating that the majority of the deviation from the maximum potential trade is attributable to inefficiency rather than statistical noise. This validates the use of the stochastic frontier framework and confirms that trade frictions between South Africa and its SADC trading partners are systematically related to observable trade policy variables.

As outlined in the methodology section, an effort was made to address potential endogeneity and identify the impact of NTMs on trade efficiency. We particularly applied the Karakaplan (2022) model which uses instrumental variables within a panel stochastic gravity frontier model. The results are presented in

Table 3. NTMs and agricultural trade efficiency in the SADC—endogeneity robust estimator.

Variable	Model 1	Model 2
Dep.var: logtotaltrade
loggdp (South Africa)	0.724 *** (0.115)	0.714 *** (0.116)
loggdp (Importer)	−0.076 (0.122)	0.064 (0.122)
distance_km	−0.000 *** (0.000)	−0.000 *** (0.000)
common_border	1.250 *** (0.311)	1.265 *** (0.319)
common_language	0.828 *** (0.245)	0.832 *** (0.247)
Dep.var: ln(σ2_u)
Constant	−6.475 *** (1.820)	−6.636 *** (1.807)
log tariff costs	0.315 *** (0.071)	0.312 *** (0.071)
log nontariff costs	1.150 ** (0.374)	1.188 ** (0.371)
Dep.var: ln(σ2_v)
Constant
Dep.var: ln(σ2_w)
Constant	−2.945 *** (0.138)	−2.942 *** (0.138)
eta1 (loggdpsa)	0.286 (1.216)
eta2 (loggdpim)	0.385 (0.719)
eta3 (logtariffcosts)	0.078 * (0.044)	0.080 * (0.044)
eta4 (lognontariff_t)	−0.018 (0.192)	0.006 (0.190)
eta Endogeneity Test	X2 = 4.04 p = 0.400	X2 = 3.46 p = 0.177
Observations	121	121
Log Likelihood	450.13	−92.15
Mean Tech Efficiency	0.5673	0.5633
Median Tech Efficiency	0.5356	0.5308

*, **, *** denotes significance at 10%, 5% and 1%, respectively. Figures in parentheses are standard errors.

. The table contains two columns. In the first column, mass variables (GDP of South Africa and GDP of her trading partners) and trade costs variables were treated as endogenous. In the second column, only trade costs were treated as endogenous. The results presented in Table 3 are largely corroborative. The coefficient on non-tariff costs is significantly larger (1.150) than the coefficient associated with tariff costs (0.315). This result demonstrates that the baseline results presented in Table 1 are not reflecting endogeneity problems.

The eta endogeneity tests returned insignificant probability values, suggesting that correction of endogeneity may not have been necessary. Notwithstanding this observation, the Hansen test returned a large chi-square value above 10 in both cases, justifying the use of lagged values of the endogenous variables as valid instruments.

Table 4. Diagnostic tests.

Diagnostic Test	Test Statistic	Implication
LR test for trade inefficiencies	−0.0493313	Stochastic gravity frontier model
Skewness of the residual	166.678 **	Stochastic gravity frontier model

** denotes significance at 1%. 5% critical value for LR = 2.706.

presents the results from diagnostic tests.

As Table 4 shows, the residual was negatively skewed, lending empirical support for a stochastic gravity model over the standard gravity model with normal errors. In addition, the LR test strongly rejected the null hypothesis of no trade inefficiencies, justifying the estimation of a gravity model with trade inefficiencies.

5. Discussion

The results of this study shed light on a critical but often underexplored constraint to agricultural trade performance in the SADC, the role of NTMs. While much of the literature and policy discourse has historically emphasized tariff liberalization, this study finds evidence that NTMs constitute a significant source of trade inefficiency between South Africa and its SADC trading partners.

NTMs in agricultural trade often take the form of SPS standards, technical regulations, import licensing, and conformity assessment procedures. While some of these measures serve legitimate public policy objectives such as protecting human, animal, and plant health, their design, implementation, and lack of harmonization across SADC member states may create excessive compliance burdens for exporters. In the case of South Africa, which often operates at a higher regulatory standard, NTMs imposed by importing countries may reflect both capacity constraints and regulatory misalignments that act as non-transparent trade barriers.

The magnitude of the estimated coefficient on NTMs surpasses that of tariffs, highlighting that behind-the-border measures are more restrictive than conventional tariff instruments. This aligns with growing empirical evidence from other regional integration efforts including ECOWAS, COMESA, and ASEAN where NTMs have been found to reduce trade flows more severely than tariffs, particularly in sectors such as agriculture where quality and safety regulations are prevalent.

Specific studies supporting a larger and more distortionary impact of NTMs on trade inefficiency than tariffs include the work of Disdier and Fontagné (2010), who show that sanitary and SPS measures significantly reduce agricultural trade flows, especially between developing countries. Similarly, Cadot et al. (2018) argue that NTMs, while often designed to achieve legitimate public objectives, often have unintended protectionist effects, especially when regulatory frameworks are misaligned across borders. This is particularly relevant in the SADC region, where regulatory heterogeneity and duplication of inspections across borders raise compliance costs for exporters and delay customs clearance, thereby increasing trade inefficiency.

In addition, the low average trade efficiency score of 0.456 observed in this study reinforces similar findings by Shepherd (2016), who demonstrate that even among countries that have signed regional trade agreements, actual trade flows often fall short of potential. In this regard, the results support the argument raised by Narayan and Nguyen (2016) that trade agreements in developing regions ought to go beyond tariff reduction and address non-tariff barriers to yield substantive gains.

This study also provides empirical support for the findings of Carrère and de Melo (2011b), who show that mutual recognition of standards and investment in regulatory infrastructure are critical for lowering NTM-related trade costs in Southern Africa. Given that many SADC member states lack harmonized SPS protocols and maintain their own conformity assessment systems, exporters including those from South Africa face the burden of duplicative testing, certification, and approval procedures. These inefficiencies not only suppress trade volumes but also discourage new market entry, particularly for small and medium-scale agricultural producers.

Importantly, while NTMs are often necessary for public health and environmental protection, their design and application matter greatly. As shown by Beghin et al. (2015a), the trade effects of NTMs depend not only on their stringency but also on their transparency, predictability, and mutual recognition. In this context, the findings from the current study highlight the need for institutional reforms and regional cooperation in the SADC bloc to mitigate the inefficiency-inducing effects of NTMs without undermining legitimate policy goals.

While the evidence presented in this study demonstrates the importance of harmonizing NTMs to enhance agricultural trade efficiency within the SADC, it is important to acknowledge the challenges accompanying its practical implementation. These challenges include sovereignty concerns, capacity constraints, and political resistance that may undermine regional integration efforts. First, sovereignty concerns are almost inevitable as member states seek to maintain regulatory autonomy to protect domestic industries and manage trade policy independently. Member states may resist external pressure to harmonize NTMs, particularly where such measures are perceived as necessary for safeguarding local producers or ensuring product safety. To address these concerns, a phased implementation approach that allows states to gradually align specific NTMs over time may be more politically feasible. Additionally, establishing clear mechanisms for policy negotiation and consensus-building can foster a more inclusive harmonization process.

Second, capacity constraints pose a substantial obstacle to effective NTM harmonization. Some SADC member states may lack the institutional and technical resources to implement standardized regulatory frameworks effectively. Capacity-building initiatives should therefore accompany harmonization efforts, focusing on training regulatory agencies, upgrading testing and certification infrastructure, and developing digital platforms for tracking compliance. In addition, external funding and technical assistance from regional organizations, such as the African Development Bank or the SADC Secretariat, could play a vital role in mitigating capacity disparities across member states.

Third, political resistance may emerge from vested interests that benefit from maintaining existing NTMs as barriers to competition. Political economy considerations are critical in understanding how certain interest groups may lobby against NTM harmonization. Addressing these dynamics requires transparent regulatory processes that include stakeholder consultations and evidence-based policy dialogue. Demonstrating the broader economic benefits of harmonization, such as increased regional market access and export diversification, could help counteract protectionist pressures.

History has notable cases where the harmonization of NTMs reduced their negative effect on bilateral trade. Examples include Singapore and South Korea where advanced customs automation systems have significantly reduced cross-border delays and compliance costs associated with NTMs (Wood et al., 2020). These countries have additionally prioritized transparency in trade regulations and ensured that exporters and importers can easily access information on the requirements they must meet, thus minimizing uncertainty and fostering smoother trade flows. It is against the background of such success cases that Boza et al. (2023) set the harmonization of NTMs in the context of Chile.

Furthermore, regional trade agreements such as the European Union’s single market have succeeded in facilitating the harmonization of standards and regulations across member states, thereby reducing the complexity and cost of meeting multiple, conflicting national regulations (Baldwin & Lopez-Gonzalez, 2015). The implementation of mutual recognition agreements within the European Union has further alleviated the burden on firms by eliminating the need for redundant certification processes. This is consistent with international initiatives such as the World Trade Organization’s Trade Facilitation Agreement (TFA) which have encouraged countries to simplify their customs procedures and enhance coordination across borders in a bid to reduce transaction costs and improve market access (WTO, 2020). These examples illustrate how well-designed policies, focusing on regulatory efficiency, transparency, and regional cooperation, are critical in mitigating the trade-restrictive effects of NTMs.

6. Limitations of the Study

Despite its contributions, this study has several limitations that should be acknowledged. First, the analysis is confined to bilateral agricultural trade between South Africa and 11 SADC member states, excluding other member states due to data availability. This selective sampling may limit the generalizability of the findings across the entire SADC region.

Second, the study employs aggregate NTM trade costs data without distinguishing between different types of NTMs (e.g., sanitary and phytosanitary measures, technical barriers to trade, import/export licenses). As a result, the study is unable to provide specific policy recommendations targeted at particular NTM categories that may have distinct effects on trade efficiency. Future studies could consider disaggregating NTMs to better capture their heterogenous effects.

Third, the study period spans from 2011 to 2022, a timeframe that may not fully capture the potential impact of more recent policy changes or emerging trade frictions in the region. Additionally, the use of lagged variables as instruments to address endogeneity could introduce measurement errors that may attenuate the estimated effects of NTMs and tariffs.

Fourth, the stochastic frontier gravity model, while effective in estimating trade inefficiencies, does not explicitly account for potential structural breaks or shocks that could have influenced agricultural trade during the sample period, such as the COVID-19 pandemic, which significantly disrupted global supply chains.

Lastly, the study is macro in nature and therefore does not incorporate firm-level heterogeneity, which may play a critical role in determining trade efficiency, particularly in agriculture where small-scale exporters may face higher compliance costs associated with NTMs compared to larger firms. Future research could explore firm-level data to provide a richer analysis of trade efficiency in the context of NTMs in the SADC.

7. Conclusions

This study has estimated the impact of NTMs on the efficiency of South Africa’s bilateral agricultural trade with 11 SADC member states, using data from 2011 to 2022 and a stochastic frontier gravity model. The results indicate that South Africa achieves only 45.6% of its potential agricultural trade with these countries, leaving a significant efficiency gap of 54.4%. The findings confirm that geography and external demand are central to South Africa’s trade potential. Specifically, trade potential decreases significantly with distance, while the GDP of importing countries is positively associated with trade, reinforcing the demand-side role in driving agricultural trade in the SADC. Additionally, shared borders and a common language are positively and significantly associated with higher trade volumes, underscoring the importance of proximity and cultural affinity in facilitating regional trade.

A key contribution of the study lies in identifying the sources of trade inefficiency. Both tariffs and NTMs were found to increase inefficiency, but NTMs are found to be more distortionary. A 1% increase in NTM-related costs is associated with a 0.67% rise in inefficiency, compared to a 0.11% increase for tariffs. This suggests that NTMs such as sanitary and phytosanitary standards, technical regulations, and import licensing requirements are more detrimental than tariffs, which have been the traditional focus of trade liberalization.

The findings highlight several institutional and regulatory constraints underlying trade inefficiency in the region. NTMs in SADC countries are often poorly coordinated, non-transparent, and cumbersome to comply with, particularly for exporters in agricultural sectors where quality and safety regulations are stringent. These inefficiencies are exacerbated by regulatory misalignment, duplicative requirements, and limited administrative capacity in many member states. While NTMs can serve legitimate public objectives, the key result of this study suggests that their current implementation appears to hinder rather than facilitate regional trade integration.

To address these challenges, policy efforts may need to shift beyond tariff liberalization to focus on second-generation trade facilitation reforms. First, NTMs should be prioritized in regional trade discussions. This includes enhancing transparency, predictability, and stakeholder consultation in the formulation and implementation of NTMs. Second, SADC member states should accelerate the harmonization of sanitary and phytosanitary standards and technical regulations, while also promoting mutual recognition of conformity assessments to avoid duplicative testing and reduce compliance costs.

Third, investments in regulatory infrastructure and administrative capacity are critical. South Africa, as the region’s most advanced economy, could take a lead role in supporting neighboring countries through technical assistance and institutional development. Fourth, the use of digital tools such as e-certification and integrated customs platforms should be expanded to streamline compliance and reduce trade delays. These tools can help bridge institutional gaps and enhance the efficiency of border processes.

In addition, the SADC should establish a dedicated mechanism to monitor and evaluate the impact of NTMs across the region. A centralized NTM observatory under the SADC Secretariat could track the use and trade effects of NTMs, promote evidence-based reforms, and foster multi-stakeholder dialogue. Finally, small-scale exporters and SMEs, who are most affected by complex regulatory requirements, should receive targeted support to build their capacity and integrate into regional value chains.

In conclusion, this study underscores the urgency of addressing non-tariff barriers as a central strategy for boosting agricultural trade efficiency in the SADC region. While tariff liberalization has made progress, NTMs seem to now present the most significant constraint to intra-regional trade. Through regulatory harmonization, institutional strengthening, and digital innovation, South Africa and its SADC partners can reduce trade inefficiencies and unlock the region’s agricultural trade potential. These reforms are essential for realizing the full benefits of regional integration and promoting inclusive economic growth.