Africa-Press – South-Africa. Trade, industry and competition minister Parks Tau says while South Africa and China have made in-principle agreements to enhance trade ties, this should not be seen as a quick solution to the ongoing trade ructions with the US.
Addressing the media during a press briefing on Monday morning, Tau said there were discussions with China regarding an announcement at this year’s Forum for China-Africa Cooperation (Focac) for lower duty trade with the second-largest economy in the world, but this was being studied.
“It is not as simple as opening up floodgates [to China]. There have been a few developments with regard to China. These include the fact that China announced at Focac this year that it will reduce tariffs to 0% for all countries but one.
“We took the opportunity to engage with the Chinese to say: ‘What does this mean?’. How do we implement it?’ This was two weeks ago. They said we need to sign the China-Africa economic partnership agreement, or some form of economic agreement, so we are able to unlock this.”
The briefing comes after South Africa failed to announce a trade deal framework with the US after weeks of negotiations with trade representatives from the largest economy in the world.
Tau said South Africa is sitting with colleagues to discuss the details and trade-offs concerning the China offer and potential trade agreements with other regions that could become strategic trade partners for South Africa.
“You have to think about how you safeguard your own market, and which industries will be impacted. There is a bit of detail to be done, but the negotiations are ongoing and we are modelling the sort of offer we will be able to give.”
He said China wanted to enter into a memorandum of understanding for developing green industrialisation which is being studied. Tau stressed this is not likely to come without geopolitical implications, regarding the US.
In April, US President Donald Trump announced “reciprocal tariffs” on South Africa and other countries, only to suspend them until August pending negotiations. Eleventh-hour talks failed to produce an agreed framework, meaning the tariffs are set to kick in on Thursday.
Also present at the briefing, international relations and cooperation minister Ronald Lamola said South Africa has been working on strengthening trade and investment partnerships with various trade partners.
“These efforts are bearing fruit, targeting markets across Africa and in Asia, Europe, the Middle East and the Americas. Our announcement on the clean trade and investment partnership with the EU in March has unlocked a R90bn investment package that has been initially committed,” he said.
A clean trade and investment partnership also aims to unlock new market access opportunities for South Africa, including the export of sustainable aviation fuel by Sasol and exports of hybrids and electric vehicles, he said.
“While facing global trade challenges, South Africa is proactively building a more resilient agricultural sector. We’ve made significant progress in opening up vast new markets such as China and Thailand, securing vital protocols for products such as citrus and others.”
Lamola said China alone was a $200bn (R3.6-trillion) market, and South Africa was confidently expanding its reach and creating new opportunities for agricultural producers in South Africa.
“Our government has not been idle. We are diversifying our trade portfolio. Under the co-ordinated leadership of the Presidency, the department of international relations and cooperation and the department of trade, industry and competition we’re making significant inroads into new, high-growth markets across Asia and the Middle East, including the UAE, Qatar and Saudi Arabia.
“The efforts are not only opening doors to new opportunities but also reinforcing our commitment to retaining the vital markets we have. South Africa’s economic future is resilient and we are working tirelessly to secure it.”
President Cyril Ramaphosa wrote in his weekly memos that South Africa has established an export support desk to assist producers affected by the US tariff changes and will announce the modalities of a support package for companies.
“The intervention will also play a key role in guiding industries looking to expand into new markets in the rest of Africa, Asia, the Middle East and markets where we have trade agreements. Strengthening regional value chains will be key to building resilience for our export markets in the longer term.”
Ramaphosa said while strengthening and establishing alternative value chains will take time, the talks present an opportunity to push forward with the implementation and expansion of the African Continental Free Trade Area.
“Reducing over-dependence on certain markets is a strategic imperative to build the resilience of our economy. It will also enable us to expand the frontiers of opportunity for South African businesses, goods and services.”
He said in the coming months, South Africa will scale up its trade missions into new markets in Africa and beyond, and the national exporter development programme which aims to grow the pool of export-ready companies.
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