Trade and industrial policy on an uneven playing field: The case of the deciduous fruit canning industry in South Africa

The deciduous fruit canning industry (DFCI) is a resource and labor-intensive industry with a high trade ratio. It offers the prospect of being a significant source of employment and export earnings for a number of southern hemisphere countries which enjoy a considerable comparative advantage. Market distortions severely constrain this outcome, however, most importantly a combination of protection and subsidies in the industrially advanced countries. In addition, as in other sectors, globalization is increasingly associated with processes in which value-added activities are located in the major markets of the industrialized countries. This paper examines the DFCI in South Africa and explores the consequences of market distortions and the shifting location of profitable activities for both industrial and trade policy in that country. (C) 1999 Published by Elsevier Science Ltd. All rights reserved.