Intra-SADC Trade Performance Review 2006: Chapter 6: South Africa

Year of publication: 
Landon McMillan, TIPS
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South Africa enjoyed a trade surplus with the rest of SADC under the review period, with trade peaking at R24.1bn in 2002. The region, though, made up slightly more that 10% of South Africa’s total trade. Imports from the SADC were 2.5% of South Africa’s total imports while exports had a 8.5% share of total.

South Africa’s leading trade partner was the EU, with more than 70% of the country’s total trade occurring with that market. From the SADC region, South Africa imported mainly mineral products and from the rest of the world, it imported predominantly machinery. The national structure of production is shaping the pattern of trade in the region though the level of development prevailing in countries surrounding SA and the state of infrastructure in these countries curtail exports.

There are mixed effects of the characteristics and changes thereof for the future pattern/direction of trade: on the one hand, a lowering of the miscellaneous barriers against the movement of goods and against trade will increase trade. In contrast, increasing FDI could lower trade as capacity develops outside SA thus increasing product variety. However, the latter could be associated with an increase in trade if FDI (and trade) allows these economies to diversify their production base However, the data analysed in this chapter suggests a declining export focus to the SADC region over the period.

In parallel South Africa is displaying growing import orientation towards its SADC partners. The data also suggest that retailers might have played a key role in SA developing RCA around its exports to the region; in other words, we can identify through the data, the importance of services in driving the expansion of trade in goods.