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-intensi ve industry with a high trade ratio. It offers the prospect of being a sign ificant source of employment and export earnings for a number of southern h emisphere countries which enjoy a considerable comparative advantage. Marke t distortions severely constrain this outcome, however, most importantly a combination of protection and subsidies in the industrially advanced countr ies. In addition, as in other sectors, globalization is increasingly associ ated with processes in which value-added activities are located in the majo r markets of the industrialized countries. This paper examines the DFCI in South Africa and explores the consequences of market distortions and the sh ifting location of profitable activities for both industrial and trade poli cy in that country. (C) 1999 Published by Elsevier Science Ltd. All rights reserved.