“Economically, no country is an island.” Countries are interdependent on each other and depend on global trade to be economically viable. South Africa being the second largest economy in Africa, has trade agreements with different countries all over the world. Besides being the largest exporter of platinum and gold it also has one of the largest stock exchanges. While its imports are mostly from China, Germany, India the United States and Saudi Arabia. Below are the countries that have trade agreements with South Africa and what those agreements entail.
The different trade agreements between South Africa and other countries throughout the world
1. Customs Union
This is a trade agreement between South Africa, Botswana, Lesotho, Eswatini and Namibia and officially called the Southern African Customs Union (SACU). Its purpose is to have duty-free movement of goods between its member states. The countries who are signatories to this agreement have a unified external tariff imposed on goods entering any of the countries from outside the SACU.
2. Free Trade Agreements (FTAs)
South African Development Community (SADC): Protocol on Trades in Goods
This is a free trade agreement between the SADC, which are the following countries: Angola, Botswana, Comoros, Democratic Republic of Congo, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, United Republic of Tanzania, Zambia and Zimbabwe. This Free Trade Agreement entails reducing barriers to trade, such as customs duties on imported products between the SADC.
South African Development Community (SADC): Protocol on Trade in Services
This is another free agreement between the SADC. The SADC Protocol establishes the framework for a preferential trade agreement that covers all commercial and tradable services in any area of the services industry. By gradually eliminating pointless or costly regulations that limit the cross-border supply of services within the SADC region, a process known as progressive liberalisation, the Protocol seeks to promote increasing intra-regional trade in services.
Trade Development and Cooperation Agreement (TDCA)
This is a free trade agreement between South Africa and the European Union. These are the countries which encompass the European Union: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden. In this trade agreement, the EU promised to liberalise 95% of its duties on goods made in South Africa, by 2010. While South Africa also committed to liberalise 86% of its duties on goods coming from the EU by 2012.
EFTA-SACU Free Trade Agreement (FTA)
A free trade agreement between the SACU (South Africa, Botswana, Lesotho, Eswatini and Namibia) and the European Free Trade Association (EFTA), which is made up of the following countries: Iceland, Liechtenstein, Norway and Switzerland. Where they agreed to reduce tariffs on all selected goods.
Economic Partnership Agreement between the SADC EPA States, and the European Union and its Member States
This is a free trade agreement between the SADC and European Union. This free trade agreement simplifies things for businesses and people who come from two different regions to trade and invest with one another and also to speed up the process of development throughout Southern Africa.
3. Preferential Trade Agreements (PTAs)
SACU-Southern Common Market (Mercosur) PTA
This preferential Trade Agreement is between the SACU (South Africa, Botswana, Lesotho, Eswatini and Namibia) and MERCOSUR countries (Argentina, Brazil, Paraguay and Uruguay). The preferential trade agreement is put in place to reduce tariffs on selected goods.
Zimbabwe/South Africa bilateral trade agreement
This is a Preferential Trade Agreement between South Africa and Zimbabwe and has been in force since 1964. This Trade Agreement entails that manufactured goods like clothing and textile and various agricultural products are given preferential access when entering both countries.
4. Non-reciprocal Trade Agreements
Generalised System of Preferences (GSP)
This is a Non-reciprocal Trade Agreement where the EU, USA, Japan, Norway, Switzerland, Russia, Turkey and Canada offer preferential market access for South African products into their markets to South Africa as a developing country. This only applies to selected agricultural and industrial products.
Africa Growth and Opportunity Act (AGOA)
This Non-reciprocal Trade Agreement is offered by the USA to South Africa and 38 other sub-Saharan African Countries, where they get preferential access to US markets by lowering tariffs or imposing no tariffs at all on selected products.
5. Current Trade Negotiations
SACU-India PTA
This Trade Agreement is still being negotiated, it is a Preferential Trade Agreement, which will be between the SACU and India, where tariffs will be reduced on selected goods.
SADC-EAC-COMESA Tripartite FTA
This is still in the negotiation stages. It is a Free Trade Agreement, it is between 26 African countries with a population of about 590 people and a total GDP of US$860 billion. This Free Trade Agreement hopes to strengthen and deepen the economic integration of the Eastern and Southern African regions.
The African Continental Free Trade Area (AfCFTA)
The African Continental Free Trade Area (AfCFTA) is still in negotiation. It is a Free Trade Agreement which will be between the 54 African Countries. This Free Trade Agreement aims to create a single market for goods and services through enhancing economic integration in the African continent, this is in line with the Pan-African Vision of “An integrated, prosperous, and peaceful Africa” enshrined in Agenda 2063. It also aims to promote structural transformation of the State Parties, through boosting intra-African trade by gradually removing tariffs and non-tariff barriers to trade in goods; and gradually liberalising trade in services.
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