TPR South Africa.pdf

[1.13 MB]

SA's trade balance declined from quite healthy surplus in 1999 and 2000 to a general neutral balance between 2001 and 2003. The movements of the Rand have been central to SA's trade. For instance, the effect of the substantial currency depreciation at the end of 2001 can be seen clearly in the large increase in exports in 2002. During 2002 and into 2003, the Rand strengthened and exports declined. 2003's decline in imports was probably due to a slowdown in domestic demand. The long-run trend shows that imports are growing more quickly than exports.

SA has consistently had a trade surplus with SADC. In fact, much of SA's large trade surplus in 1999 and 2000 appears to be due to trade with SADC. Trade with SADC is growing marginally quicker than trade with the rest of the world. SADC trade also mirrors world trade in that imports are growing quicker than exports, but SA exports to the region are still nearly five times as much as imports. Exports to the region make up almost 10% of SA's total exports, while imports from the region account for only 2% of total imports.

The fact that trade with the region is unbalanced explains why SA has undertaken asymmetrical liberalisation as part of the SADC Trade Protocol. The unbalanced trade may also be reflective of SA's relatively good infrastructure for getting products to markets, and the SADC countries' relatively weaker infrastructure. It may also be due to the terms of trade between SA and other SADC countries - SA exports mainly higher value-added manufactured goods but imports largely lower value primary commodities. SA's main formal statement of trade policy from Government, GEAR (Growth, Employment and Redistribution), was issued in 1996 as part of the country's macroeconomic strategy. GEAR was similar in many respects to a structural adjustment programme, and sought to make the economy more competitive and export-focused by reducing very high tariffs - one of the side-effects of sanctions and disinvestment during the apartheid era. SA acceded to the WTO in 1995 and the initial offer contained significant cuts in levels of protection. Tariffs were reduced from the mid-1990s, faster than the rate bound in the WTO offer. This process ended around 2000. Since then, SA has pursued liberalisation through bilateral trade agreements.

SA Export Opportunity.pdf

[361 KB]

South African and global trade is greatly affected by the growth and stability of world markets. Global food demand is altered by changes in world population, economic growth, and income. Other factors affecting trade are global supplies and prices, changes in exchange rates, government support of agriculture and trade policies.

Within the next 20 years, the world will gain another 1.4 billion people. Representing a 25-percent increase in global population, most of these people will live in the expanding urban centres of developing countries and will add greatly to the world’s demand for food. Prospects are good that economic growth in developing countries will continue, raising the incomes and improving the diets of the 5 billion people currently living in those countries. Demand for meats, vegetables, fruits, dairy products, vegetable oils, processed foods, beverages and other goods will soar as consumers use their higher incomes to diversify their diets away from grains and other staple foods. Economic growth also means increasing urbanisation and, for many households, an end to growing their own food and a rise in the tendency to purchase food from supermarkets and convenience stores. These trends are already well underway, and urban retailers are tapping supplies from home-country producers, as well as from around the world – to the extent their governments will allow (USDA, 2004).