South Africa’s trade policy aims to support industrial development, sustainable economic growth, decent well-paying jobs and economic inclusion, and seeks to improve the balance in the country’s international trade by increasing exports of higher value-added manufactured goods. The World Trade Organisation (WTO) serves as the most influential external force for reform. South Africa is a member of the 164-member WTO and supports the principles of a rules-based multilateral trading system, where independent arbitration, rather than power relations resolves disputes. The key to the legitimacy and sustainability of the WTO lies in its ability to advance the developmental interests of developing countries that will constitute new sources of global growth and prosperity in the world economy. Meeting this challenge will serve to strengthen the multilateral, rules-based trading system, enhance its legitimacy, and also create the basis for economic growth from which all WTO members can benefit.
South Africa has advantageous access to world markets through free trade agreements with major markets such as Europe and the UK, and a preferential trade arrangement with the US. South Africa is also a member of the Southern African Development Community (SADC) and the Southern African Customs Union (SACU). The country is regarded as a geographic gateway to the rest of the continent, and is strategically positioned for access to the African market. South Africa’s trade negotiations are conducted alongside its country partners in SACU, comprising Botswana, eSwatini, Lesotho, and Namibia, following the renewed SACU Agreement in 2004 that requires SACU to negotiate all trade agreements as a bloc. SACU, at present, enjoys free trade agreements (FTAs) with the 27-country EU, the UK, as well as the European Free Trade Association (EFTA) comprising Iceland, Lichtenstein, Norway and Switzerland. SACU is also part of the 15-country SADC free trade area, has a preferential trade agreement (PTA) with the Common Market of South America (Mercosur), comprising Argentina, Brazil, Paraguay, Uruguay and Venezuela, while South Africa also enjoys duty-free and quota-free entry into the US market under the African Growth and Opportunity Act (AGOA), a unilateral trade preference programme.
The South African automotive industry forms an integral part of international supply chains by being fully integrated into the global automotive environment, and hence, the economic climate in international markets impacts the industry’s export performance. As an export-oriented industry, it is essential for the domestic automotive industry to continue diversifying risk by pursuing wider geographical exposure to mitigate the impact of country or regional cyclical economic conditions. The reach with respect to the number of destinations of vehicles and automotive component exports from South Africa remains high. The focus of the domestic automotive industry is to build on existing exports and to escalate the importance of exploring and exploiting new export opportunities. In 2022, the top export destinations for domestically manufactured vehicles and automotive components remained the markets in the Eurozone, Africa and the US.