South Africa participates in a number of preferential trade relationships, both regional and bilateral. It is a signatory of the General Agreement of Tariffs and Trade (1047) (GATT), which is managed by the World Trade Organisation (WTO)
South Africa is committed to the principles of these organiations and to increasing South Africa’s global competitiveness. Tariffs have been reduced, and non-tariff barriers are being phased out.
South Africa places great importance to forming strong economic trading blocs to gain access to key markets. The South African government has actively pursued negotiations for an agreement on trade, development and co-operation with the European Union (EU). This agreement will pave the way for developing secure markets in the EU for South African businesses.
South Africa is also pursuing agreements for greater South-South co-operation and is in the process of establishing relations with Mercusor via the trade agreement with Brazil and India.
South Africa participion in the Southern African Development Community (SADC) comprising 14 sub-Saharan African countries allows access to a market of approximately 170 million.
Free Trade Agreements
South Africa has also negotiated two free trade agreements, namely:
T he Trade Development and Co-operation Agreement (TCDA)
South Africa’s trade relations and development co-operation with the EU are governed by the TCDA. The TCDA’s ratification is still on going and the agreement is being provisionally applied. The main objective of the TCDA is to create a free trade area between south Africa and the EU over a 12 year period.
SADC Free Trade Agreement
Twelve of the 14 member states of the Southern African development Community (SADC) have officially launched a free trade area. With the goal of eliminating tariffs and trade barriers among member countries the FTA agreement is part of the SADC’s ongoing efforts to deepen long term integration in order to accelerate economic growth.
Preferential Trade agreements
South Africa, (over and above these agreements) are also the recipient of unilateral preferential trade agreements. In these arrangements other countries provide access to their markets through lower tariffs and increased or no tariffs.
The US provides such market access opportunities to 39 sub Saharan countries, including South Africa, through the Africa Growth and Opportunity Act (AGOA).
A number of other countries provide market access trough the Generalised System of Preferences (GSP). South Africa has been granted GSP status by the European countries such as Canada, Czech Republic, Hungary, Japan, Norway, Switzerland and the US)
Africa Growth and Opportuntiy Act (AGOA)
AGOA builds on existing US trade programs by expanding the duty free benefits previously available only under GSP.
Duty free access to the US market under the combine AGOA/GSP program stands at approximately 7 0000 product tariff lines. These include items such as wine, selected motor vehicle components, some agricultural products, steel, clothing and footwear, and steel amongst others.
Other Trade Agreements
The South African Customs Union (SACU)
This area includes South Africa, Botswana, Lesotho, Nambia and Swaziland. The SACU allows goods to move duty free between the five countries. A common external tariff is imposed on goods entering any of the countries from outside the SACU.
The Common Monetary Area (CMA) includes four SACU countries, namely SA, Lesotho, Namibia and Swaziland.
European Free Trade Association (EFTA) and Southern African Customs Union (SACU)
The Free Trade Agreement between the Member States of the European Free Trade Association (EFTA) - Iceland, Liechtenstein, Norway and Switzerland – and the Southern African Customs Union (SACU) – comprising the Republic of Botswana, the Kingdom of Lesotho, the Republic of Namibia, the Republic of South Africa and the Kingdom of Swaziland.
The EFTA States and the members of the Southern African Customs Union (SACU) held their first Joint Committee meeting on 3-4 February 2009 in Pretoria, Republic of South Africa, and nine months after the entry into force of the Free Trade Agreement.