Trade relations

South Africa's trade relations

South Africa participates in a number of preferential trade relationships, both regional and bilateral. It was a founding member of the General Agreement on Tariffs and Trade (1947), and is an active member of the World Trade Organisation.

It is committed to the principles of these organisations, and to increasing South Africa's global competitiveness. Tariffs have been reduced, and non-tariff barriers are being phased out.

Forming strong trading blocs
Given the high level of competition for foreign direct investment among emerging markets, South Africa has placed greater importance on forming strong economic trading blocs to gain access to key markets.

Please note: trade statistics, and relations, are highly fluid. Please check the official government sources for the latest data.

The South African government has actively pursued negotiations for an agreement on trade, development and co-operation with the European Union (EU). This agreement will pave the way for developing secure markets in the EU for SA businesses.

South Africa has also turned its attention to pursuing agreements for greater South-South co-operation. The move to establish trade relations with Mercusor via a free trade agreement with Brazil, and also with India, is top of the government's export-oriented trade agenda. This will facilitate greater trade with South America and the East.

South Africa's participation in the Southern African Development Community (SADC), comprising 14 sub-Saharan African countries, allows access to a market of approximately 140-million, which is expected to grow at an annual rate of around 3%.

General trade agreements
South Africa has negotiated a host of general trade agreements since 1994 as part of the process of normalising trade relations with international trading partners.

General trade agreements do not make provision for market access in specific sectors, but essentially allow for Most Favoured Nation tariff treatment, which is the global minimum standard for international trade relations as established under the World Trade Organisation (WTO).

Free trade agreements
In addition to these general trade agreements, South Africa has also negotiated two free trade agreements, which allow for preferential access (lower tarriffs) between signatory countries for specific products across sectors:

The one agreement is with the South African Development Community (SADC), and the other is with the European Union (EU), named the SA-EU Trade Development Co-operation Agreement.

South Africa is also exploring free trade agreements with Mercosur, EFTA, India, China, Nigeria and possibly the USA.

Preferential trade arrangements
Over and above these agreements, South Africa is also the recipient of unilateral preferential trade arrangements. In these arrangements, other countries unilaterally provide access to their markets through lower tariffs and increased/ removed quotas.

These arrangements are not negotiated and can be unilaterally amended by the providing country, and are therefore not agreements.

The US provides such market access opportunities to a number of African countries, including South Africa, through the African Growth and Opportunity Act (AGOA).

A number of other countries provide market access through the generalised system of preferences (GSP) mechanism. South Africa is accorded GSP status by European Union countries as well as Canada, Czech Republic, Hungary, Japan, Norway, Switzerland and the US.