Displaying items by tag: Trade trends

South Africa had a R21.7 billion trade surplus in the fourth quarter of 2023, up from R7.8 billion in the fourth quarter of 2022, but lower than the R41 billion registered in the third quarter of 2023. Imports declined by R17 billion to R498 billion in the year to the fourth quarter of 2023, while exports declined by 0.5% to R519 billion in same period. This was in part due to a R22 billion fall in coal exports in the fourth quarter of 2023.

South Africa’s merchandise export performance bounced back in the third quarter of 2020, growing by 9.2% (year-on-year) and 40.2% from the previous quarter amounting to R388 billion, an impressive improvement from the historic slump experienced in the second quarter of 2020 as a result of the lockdown. The third quarter of 2020 saw the pace of decline in imports moderating to 19.6%, compared to the 26% decline in Q2 2020 (year-on-year), in constant rand terms. In US dollar terms, merchandise exports experienced a marginal decrease of 2.4% in Q3 2020 to US$22.9 billion, while imports dropped by 28.2% to US$16.4 billion from Q3 2019. South Africa continued on a positive trade balance, recording a sixth straight quarter surplus of R109 billion (US$6.5 billion) in the third quarter of 2020, the highest recorded over the observed period. This record trade surplus is mainly due to the impressive rebound in export demand as most economies reopened in the third quarter of 2020, easing restrictions on business activities, with imports still declining although at a slower pace.

The second quarter of 2020 saw a strong decline in exports, combined with an even stronger slump in imports as international trade slowed down because of the COVID-19 pandemic. Several sectors, however, particularly agriculture and parts of mining, were able to increase exports over the quarter. Stringent COVID-19 containment measures implemented in most countries led to the plummeting of merchandise trade, with the “Great Lockdown” seeing South Africa through a five-week, hard nationwide lockdown in the second quarter of 2020. Exports dropped by 32.5% in US dollar terms, while imports plunged to US$14 billion in the second quarter of 2020, down by 39.2% from the same period last year. However, because of the depreciation of the rand, the decline in both exports and imports in rand terms was a little lower compared to the decline in dollar terms – with rand exports down by 17.6%, and imports by 25.9%.

Media Release: Growth in SA exports to China

A global transition to sustainable development is under way and strengthening as a response to multiple socio-environmental crises, including the global impacts of climate change. From a trade and industrial perspective, this transition has implications on the composition and dynamics of entire value chains. This concerns what inputs are accessed, the processes that underlie production, what goods and services are produced, as well as what happens to these products post-consumption. The transition materialises through two complementary streams: the development of new, green industries and the greening of existing, traditional industries. This report aims to shed light on the trade-related risks faced by South Africa as a result of the global transition to a low-carbon economy by delving further these underlying factors and unpacking South Africa’s trade patterns from a carbon perspective

WTO reform and the crisis of multilateralism: A Developing Country Perspective

By Faizel Ismail

The WTO has not been able to recover since the collapse of the Doha Round in July 2008. Several ministerial conferences including the Buenos Aires meeting in December 2017 failed to reach agreement. The US Trump Administration launched a campaign to reform the WTO in 2018 and 2019. This book argues that the Trump Administration reform proposals have been much more aggressive and far-reaching than the Obama Administration before it, threatening to erode hard-won special and differential treatment rights of developing countries. By blocking the appointment of new Appellate Body members, the US has effectively paralysed the Appellate Body and deepened the crisis of the multilateral trading system. Developing countries have responded to the proposals and called for the WTO to be development-oriented and inclusive. This book provides a critical analysis of the US-led reform proposals and seeks to build a discourse around an alternative set of concepts or principles to guide the multilateral trading system based on fairness, solidarity, social justice, inclusiveness and sustainability.

Professor Faizel Ismail is the Director of the Nelson Mandela School of Public Governance at the University of Cape Town. He has a PhD in Politics from the University of Manchester, United Kingdom (2015); an MPhil in Development Studies from the Institute of Development Studies (IDS), Sussex (1992); and BA and LLB Degrees from the University of KwaZulu-Natal (Pietermaritzburg) in South Africa (1981 and 1985). He has served as the Ambassador Permanent Representative of South Africa to the WTO (2010-2014). As South Africa’s Chief Trade Negotiator, since 1994, he led the new democratic South Africa’s trade negotiations with the European Union (EU), Southern African Development Community (SADC), Southern African Customs Union (SACU), and several other bilateral trading partners including the US, India, and Brazil. He was also South Africa’s Special Envoy on the South Africa-USA AGOA negotiations between January 2015 and June 2016. Professor Ismail is a TIPS Research Fellow. He is the author of two books on the WTO: Mainstreaming Development in the WTO. Developing Countries in the Doha Round (2007) and Reforming the World Trade Organization. Developing Countries in the Doha Round (2009). He is an associate editor of the Journal of World Trade.

This book is published by the South Centre with support from Trade & Industrial Policy Strategies

https://www.southcentre.int/

Find other South Centre publications at: https://www.southcentre.int/publications-catalogues/

In the first quarter of 2020, which represents the period before widespread global lockdowns were implemented due to the COVID-19 crisis, South Africa continued with a positive trade balance. A trade surplus of R34.7 billion in constant rand was recorded in Q1 2020, up by 42% from the previous quarter. The increase in the trade balance is attributed to exports having declined at a much lower rate than imports as an initial response to the COVID-19 economic impact, as well as a decline in imports due to the earlier shut down in China and a significant drop in the value of crude oil imports of about R10.5 billion.

South Africa’s trade balance remained positive for the third consecutive quarter, recording a surplus of R23.2 billion in constant rand in Q4 2019 from R6 billion in the previous quarter. The upswing in the trade balance came about as the value of merchandise imports sharply declined by 5.6% to R319 billion in Q4 2019, compared to exports which decreased slightly by 0.6% from R344 billion in Q3 2019 to R342 in Q4 2019.

The South African economy is affected by the COVID-19 pandemic through:

• The sharp fall in growth initially in China and then in Europe and the US as a result of measures to contain the virus; and
• The increasing pressure to exercise social distance and lock down households and businesses to slow the spread of COVID-19, including in South Africa (from 26 March 2020) as well as all its major trading partners.

These measures brought an extraordinarily sharp decline in global production and
employment, especially in the US and Europe, over the past month. The result will likely be a global recession, with very uncertain prospects for recovery despite the adoption of extremely large stimulus packages in the US and much of Europe.

This briefing note first outlines the progress of the pandemic internationally and in South Africa. It then summarises key economic consequences, which have led to (widely varying) projections for global and South African growth. A final section reviews international and South African economic policy responses to the sharp slowdown.

The economic impacts of COVID-19 are changing rapidly. Information in this briefing note is valid as of 26 March 2020.

Download a copy or read the policy brief online.

This policy brief attempts to identify potential risks for South Africa as a result of the COVID-19 epidemic. To that end, it first provides a brief overview of the developments since the first cases of COVID-19 were reported in China. It then focuses on trade, identifying South Africa’s top exports to and imports from China. On that basis, it outlines the potential impact on major exports and on the supply of intermediate inputs as well as consumer goods.

Main Bulletin: The Real Economy Bulletin - Second Quarter 2019  

In this edition

GDP growth: Statistics South Africa reported rapid growth in the GDP in the second quarter, at 0.8% in actual terms – that is, 3% at an annualised rate. The data continue the increased volatility in the GDP data over the past five years. The data also again raise questions about the seasonal adjustment of the quarterly GDP data. Read more. 

Employment: After a sharp fall in the first quarter, employment in the real economy was essentially stable in the year to the second quarter of 2019. It is now at the same level it was in 2015. Read more. 

International trade: Both imports and exports increased between the first and second quarters. Only marginal growth was observed compared to the same period last year. Read more.

Investment and profitability: Investment fell almost 2% in year-on-year terms through the second quarter of 2019, although it showed a sharp recovery in the past quarter. The decline was due entirely to a fall in public sector investment over the year, with gains in the second quarter of 2019 reflecting a steep improvement in private business investment. Read more.  

Foreign direct investment projects: The TIPS FDI Tracker tracks foreign direct investment projects, analysing new and updated projects quarterly. Based on media monitoring, it added 17 projects this quarter – the bulk of which came to completion – while one project was updated. Read more. 

Briefing note: Seasonality in the GDP data: According to official Statistics South Africa GDP data, even after adjusting the data to remove seasonal variations, the economy contracted in the first quarter of 2019 in five of the six years from 2014 to 2019. In contrast, the economy reportedly shrank just twice in the second quarter, once in the third quarter, and not at all in the fourth. These data point to an extraordinary shift in the GDP data, with the emergence of an annual cycle in the seasonally adjusted quarterly figures.Read the briefing note online: Seasonality in the GDP data. 

Briefing note: Industry Master Plan methodology: The relaunch of industrial policy from early 2019 included proposals for Master Plans for priority industries.This briefing note draws on experience with the development of Master Plans for various sectors as well as the experience of sector strategies in the auto industry to propose a standard methodology for the process. Read the briefing note online: Industry Master Plan methodology. For a more detailed discussion of this topic see TIPS Policy Brief Master Plans for industrial policy.

Briefing note: Brexit and South African trade: The current disarray in British politics centres on the nature of Brexit, with no consensus in sight either on how it should be achieved, or on the UK’s future relationship with the EU. The new Prime Minister has faced strong resistance to a no-deal exit, but it is not clear what proposals could achieve a majority in Parliament, much less support from most British citizens. Because the UK is still one of South Africa’s major trading partners, the final outcome will have significant implications for our own economyRead the briefing note online: Brexit and South African trade.

Briefing note: FDI that supports development priorities – Measuring the “quality” of foreign direct investment: The intensified drive to increase investment raises the question of “quality” of FDI into South Africa. That in turn points to the importance of developing tools or mechanisms to assess FDI, with the aim of maximising its benefits towards achieving inclusive industrialisation. It is important to understand the extent to which projects contribute to South Africa’s development priorities – at a granular level, essentially being able to measure their value-add against developmental priorities. Read the briefing note online: FDI that supports development priorities.

This paper reviews the state of play of the African regional integration agenda, inspired by the vision of the Abuja Treaty and Agenda 2063. It argues that the Continental Free Trade Area (CFTA) negotiators should adopt a “development integration” approach to ensure that the outcome of the CFTA benefits all its members. Towards this end, the CFTA negotiators should work on three parallel tracks: a) they must ensure that the architecture of regional integration is asymmetrical in favour of the Small, Vulnerable Economies (SVEs) and the Least Developed Countries (LDCs); b) they must prioritise the fullest participation of all Africa’s members in regional productive value chains that enhance Africa’s industrialisation; and c) they must facilitate the co-operation of member states towards the building of cross-border infrastructure. It is argued that this vision and agenda of the CFTA and Agenda 2063 provide Africa with a powerful negotiating mandate to drive the process of engagement between Africa and its main trading partners, multilaterally in the World Trade Organization (WTO) and bilaterally with the European Union (EU), United States (US), China and others.