SA exporters urged to focus on current – rather than future – trade agreements
12 Feb 2018 - by Nicole Jacobs
A commitment from African leaders to implement trade agreements that are already in place is more important to South African exporters than negotiating new trade agreements.
This is the opinion of senior consultant and director at trade consultancy Tutwa Consulting Group, Catherine Grant Makokera.
She pointed to the patchy implementation of agreements such as the Southern African Development Community (SADC) Free Trade Agreement which was meant to give exporters preferential market access to neighbouring countries outside of the Southern African Customs Union by reducing duties and removing non-tariff barriers in the region.
“Exporters are faced with numerous instances where trade is hampered by policies that are not in line with the SADC agreement, such as the import licensing requirements and other restrictions introduced by Zimbabwe in the last year,” said Grant Makokera.
She added that trade agreements currently being negotiated, such as the Tripartite Free Trade Agreement (TFTA) – which would bring together countries from Cape to Cairo under the same umbrella – and the Continental Free Trade Agreement (CFTA), which would expand the TFTA to include West and North African states, held no commercial implications at the moment and had no clear impact on exports from South Africa.
However, Department of Trade and Industry spokesperson Sidwell Medupe told FTW Online that trade agreements such as the CFTA were important as they aimed to address the issue of small and fragmented markets on the continent by establishing an integrated market of over 1 billion people with a GDP of US$2.6 trillion. He said that this would open market access opportunities for South African products.
“A critical objective in this regard is to provide South Africa with opportunities to increase exports of value-added products through expanded market access on the basis of legal certainty without unduly limiting development policy space.”
He added that the regional economic communities and SADC were the building blocks for the CFTA and therefore all trade agreements were being prioritised by government in order to contribute to sustainable economic development and inclusive growth.
“World Trade Organisation figures state that with the establishment of the CFTA, imports from outside the continent would decrease by US$10 billion per year, however agricultural and industrial exports would increase by US$4 billion and US$21 billion respectively,” Medupe said.