Articles for October 2021
The EU Green Deal: how will it impact South African agricultural exports?
The European Union (EU) is the second most important market for South Africa's agricultural products, accounting for 27% of the country's total agricultural exports. Despite South Africa transitioning from the Trade Development Cooperation Agreement (TDCA) to the Economic Partnership Agreement (EPA) to secure continued and improved market access in the EU, a new set of regulations under the EU Green Deal and its Farm to Fork Strategy are set to impose additional compliance costs that will likely negate the benefits of existing preferential trade arrangements. We present a set of challenges, opportunities, and risks that both government and the private sector need to address if South Africa aims to increase agricultural exports to the EU.
Why South African agricultural products face frontiers in African markets
South Africa's export-oriented agricultural sector is heavily reliant on the African continent, accounting for over 40% of annual exports. The African Continental Free Trade Area (AfCFTA) is expected to propel South Africa's market presence beyond the South African Development Community (SADC) region. However, we argue this optimism might be misplaced, given specific structural challenges that will likely limit the potential for South Africa to increase agricultural exports in untapped African markets.
Is South Africa's trade policy failing the agricultural sector?
South Africa's agricultural exports have grown significantly over the past two decades. Yet agricultural private-sector role players typically argue that the government has not done enough to open up new markets for ever-increasing produce. This failure has limited the country's scope to grow exports beyond existing traditional markets in the European Union (EU) and the African continent. In markets outside these regions, private-sector players argue that the growth in South Africa's agricultural exports has primarily been driven by productivity gains whose competitive advantage overcomes the costs of high tariff and non-tariff barriers. However, a review of South Africa's trade agreements paints a different view, suggesting that private-sector role players might be downplaying the achievements of the past two decades.