Trade and Industry

15 Year Review - Trade

  • Year: 2010
  • Organisation: TIPS
  • Publication Author(s): Ximena Gonzalez-Nuñez
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South Africa's trade policy has undergone much change as the country approaches its second decade of democracy. In particular, of more recent interest on the global sphere, and hence on the domestic front, have been the trade issues du jour, including trade in services and behind-the-border issues such as non-tariff measures and competition.

Trade remains an important facet of the country's economy, and although growth has improved since the 1990s when economic growth of 1% was being experienced, it is generally agreed that South Africa needs to grow its economy by more than the 5% it is averaging currently per annum. Increasing growth in the country's exports is seen as one key objective in the country's path to achieving more robust growth, but of course a crucial question is how this can be done.

Numerous challenges have arisen which have affected South Africa's ability to realise this objective. Amongst these are issues such as volatility of the exchange rate and a widening trade deficit, together with political crises plaguing African trading partners such as Kenya and Zimbabwe. Expanding infrastructure bottlenecks, for example related to maritime transport, and increasing uncertainty regarding energy supply are further limiting factors that are not part of the trade policy arena per se, but do impact on the country's ability to expand its exports. This is also linked to an important area of policy concern, which relates to how trade policy complements, and is complemented by, other economic policies, such as the industrial policy, in a pragmatic way. On the bilateral and multilateral front further difficulties have arisen, for example, within the context of the Doha negotiations related to liberalisation in agriculture, as well as the Economic Partnership Agreement (EPA) negotiations with the European Union (EU).