South Africa in the World Trading System

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1、8. South Africa in the World Trading SystemByTrudi HartzenbergSAPES TrustHarare, ZimbabweandRashad CassimTrade and Industrial Policy SecretariatJohannesburg, South Africa1.IntroductionThe conclusion of the Uruguay Round of trade negotiations coincided with South Africas transition to a democratic di

2、spensation in 1994. This coincidence of events marked South Africas return to the international economic community and more active participation in the regional integration initiatives in southern Africa. South Africas unilateral commitment to trade liberalization was strengthened by its World Trade

3、 Organization(WTO) commitment (it became the first African country to tender a General Agreement on Tariffs and Trade GATT offer), which in turn bestowed credibility on the countrys outward-oriented development strategy. This paper focuses on South Africas interface with the WTO. Despite being an or

4、iginal signatory to the GATT in 1947, South Africas status was unclear owing to its apartheid policies and the stringent trade and investment sanctions against the country, especially during the 1980s. The paper begins with an examination of South Africas trade policy and performance, pre- and post-

5、Uruguay. Next, it surveys South Africas market access conditions and examines the impact of the Uruguay Round agreements on that access. The paper analyses the influence of the WTO on the countrys trade policy and related policy initiatives, and then focuses on South Africas regional and bilateral t

6、rading agreements and assesses whether these are in conflict with or complementary to the countrys multilateral trade strategy. Finally, an assessment of future trade and related challenges, and the countrys priorities in this regard, are explored.2.South Africas trade performance South Africa is a

7、typical middle income country with a highly diversified industrial structure. Its trade profile is by contrast much less diversified, although the export sector has become increasingly diversified, especially since the early 1990s. Table 8.1 shows the changing composition of South Africas exports si

8、nce the late 1980s.Table 8.1: South Africas export profile, 1988_1996Category 1988 1992 1996Gold 36% 27% 22%Primary products 20% 21% 20%Beneficiated primary products 23% 23% 28%Material intensive products 5% 5% 7%Manufactures 6% 13% 18%Source: Industrial Development Corporation. The traditional sign

9、ificance of gold in terms of its contribution to GDP and to export earnings, as during the recent past shown a marked decline. By contrast the relative importance of other commodities has increased. Diamonds, metallic minerals, coal, platinum, metal ores and others, in particular, are growing in sig

10、nificance. Despite this diversification, primary commodities still dominate South Africas trade profile. Table 2 shows the percentage contribution of all minerals, and gold in particular, to total exports for the period 1985_1995.Table 8.2: South Africas exports: Contribution of minerals (in percent

11、ages)Year1985198619871988198919901991199219931995All minerals66.7666057.757.154.253.249.148.742Gold43.442.540.33833.831.2302929.720Sources: Department of Mineral and Energy Affairs, Central Statistical Services, Industrial Development Corporation.When examining products in which South Africa has a r

12、evealed comparative advantage (RCA), it is not surprising that minerals and other material-intensive products emerge as key products. Table 8.3 lists those products (based on the 1996 Harmonized System HS code) where South Africa has an RCA greater than 0.5.Table 8.3: South Africas revealed comparat

13、ive advantage1996 HS CodeProduct categoryRCA71Pearls & precious stones 11.929026Ores, slag & ash 9.882208Edible vegetables 5.894325Salt, sulphur & earths 5.671811Milling products 4.696075Nickel & articles 4.538481Base metals 4.429751Wool, fine & coarse 4.064072Iron & steel 3.833628Inorganic chemical

14、s 3.463420Vegetable preparations 3.307747Pulp of wood 2.724422Beverages & spirits 2.643341Hides, leather & skins 2.226406Trees & plants 1.869574Copper & articles 1.794217Sugar & confectionery 1.655027Mineral fuels & oils 1.254003Fish & aquatic products 1.209110Cereals 1.167912Oil seeds & grains 1.01

15、7648Paper & paperboard 0.967536Explosives & pyrotechnics 0.831915Animal & vegetable fats 0.801631Fertilizers 0.799286Railway locomotives 0.792044Wood & articles 0.768394Furniture & medical 0.683301Live animals 0.667468Building products 0.621338Other chemicals 0.617873Articles of iron or steel 0.6154

16、Source:UNCTAD, 1997a, Trade Analysis and Information System.South Africas recent trade patternsManufactures, which currently constitute less than 20% of South Africas exports, are showing significant growth, albeit from a small base. For the last five years manufactured exports have grown at an aver

17、age of approximately 5% per annum in U.S. dollar terms (CSS). The sectors that have accounted for this growth are: Iron and steel (20% growth per annum, on average) Beverages (37%) Electrical machinery (29%) Metal products (19%) Transport equipment (19%) Industrial chemicals (9%)The average annual g

18、rowth rates for the last five years are shown in parentheses (Bureau of Economic Research). What emerges from closer analysis is that since the late 1980s South Africas downstream export capacity has improved. Manufactured exports, beneficiated mineral exports and material intensive export products

19、have shown noteworthy increases. These value-added products increased their contribution to total exports from approximately 30% in 1988/89 to approximately 50% in 1995/96. There is still a long way to go, however, as primary and semi-processed products still dominate South Africas exports. Developm

20、ent of the countrys downstream manufacturing export capacity is therefore a priority.As is to be expected, the destinations for South Africas exports differ across markets. Non-traditional exports tend to be associated with non-traditional markets. Of significance for South Africa is the most favour

21、ed nation (MFN) phase-out schedule for specific markets, specifically for African countries where South Africas manufactured exports have been growing, in U.S. dollar terms, at 12% per annum on average for the period 1991 to 1996. Table 8.4 shows the growth of Southern African Customs Union (SACU) e

22、xports (since these are dominated by South Africa, the data can be interpreted as reflecting growth in South Africas exports).Table 8.4: Growth of SACU exports, 1992_1994 and 1992_1996 (in percentages)Destination 1992-1994 1992-1996Southern Africa19.3 29.6Rest of Africa 30.66 44.25Europe 7.64 10.91E

23、EC 10.72 18.84EFTA 22.32 4.63Central Europe -0.71 21.42Rest of Europe -26.86 49.94America 9.78 9.70North America 1.34 4.47Central America 106.64 57.11South America 39.56 32-3Asia 11.93 17.89South Asia 98.83 98.00East Asia 13.48 17.89ASEAN 13.48 56.65China region 69.03 12.66Middle East -2.10 12.76Oce

24、ania 7.55 43.76Note: Calculations based on nominal rand values.Source: South African Customs and Excise Department.For the period 1992_1997, five major regions are the recipients of approximately 83% of South Africas exports. The regions and their percentage share of South Africas manufactured expor

25、ts are the European Union, taking 33%, the Far East (19.2%), Southern Africa (14.5%), North America (9%) and the rest of Africa (6.9%). This picture is distorted by the fact that the bulk of diamond exports, falling in the category other manufactures from SACU, goes to the European Union. Exclusion

26、of this category leads to the breakdown of manufactured exports for these five regions shown in Table 8.5.Table 8.5: Breakdown of South Africas manufactured exports (%), excluding other manufacturesRegional shareAnnual growth rate1992_96European Union24.3% 4.7%Far East23.1% 11.9%Southern Africa17.8%

27、 15.4%North America10.1% 11.6%Rest of Africa 8.5% 24.3%Source: Industrial Development Corporation (1997).These revised figures indicate a slowdown in growth of exports to the European Union. They also show that growth of exports to the rest of Africa is the most significant.A focus on exports to Afr

28、ican countries reveals that two-thirds of these are destined for southern African countries: Angola, Mozambique, Zimbabwe, Zambia and Malawi. Growth of exports to the southern African region averaged 15.4% per annum for the period 1992_1996. Four sectors accounted for the significant growth. These w

29、ere: Chemicals, rubber and plastics Metal products and machinery Transport equipment Food, beverages and tobacco (IDC, 1997)The largest and fastest growing African markets are Zimbabwe, which absorbs one-third of manufactured exports and grew by 24% per annum for the period 1992_1996, and Mozambique

30、, which absorbs 14% of manufactured exports and also grew by 24% per annum. Zambia is drawing 10.5% of South Africas manufactured exports to the African continent, and exports grew by 5.2% per annum from 1992 to 1996. The growth of South Africas exports to countries beyond southern Africa has been q

31、uite significant. In particular, exports of chemicals, metal products and machinery have increased significantly, although from a small base. Exports in chemicals, rubber and plastics, metal products and machinery, food, beverages and tobacco, and transport equipment recorded a 32.9% increase from 1

32、992 to 1996 (IDC, 1997). The most important markets absorbing these exports include Zaire (US$314 million in 1996), Tanzania (US$8 million in 1996) and Mauritius (US$124 million in 1996), while exports to Madagascar, Ghana, Nigeria, Egypt and Uganda are also gathering momentum, again from a small ba

33、se.A number of studies have attempted to assess the trade potential of various regional integration arrangements in Africa. For our analysis, those that have focused on southern Africa have indicated that the trade potential for the Southern African Development Community (SADC) region is relatively

34、poor (Cassim and Hartzenberg, 1997, for example). A particularly important issue is whether South Africa, as the dominant economy of the region, is singularly poised to reap the trade gains from regional integration. Data presented above seem to support the conclusion that this may indeed be the cas

35、e. The reasons for this are complex, and are rooted in comparative advantage, traditional trade and other economic relations, and trade policy differences. Recently a number of concerns have been raised about access, specifically by countries in southern Africa, to South African markets. The Zimbabw

36、ean clothing and textile debate, a particular issue in the renegotiation of the South Africa_Zimbabwe free trade agreement, is a case in point. Zimbabwean footwear producers have also vociferously protested at the (quota) protection that was afforded South African footwear manufacturers in early 199

37、7. Similar concerns are being heard from Zambia and other southern African neighbours.The Far East drew approximately 80% of South Africas total manufactured exports destined for Asia in 1996. The newly industrialized countries (NICs)Hong Kong, Singapore, Taiwan, South Korea, Malaysia, Indonesia, Th

38、ailand and the Philippinesabsorbed 60% of these exports. A breakdown of the composition of these exports indicates that basic metals accounted for 60% of the total exports to this region, indicating a shift in South Africas basic metal exports away from the European Union to the Far East. Exports to

39、 four of the NICsTaiwan, Hong Kong, South Korea and Singaporeaccounted for more than 80% of manufactured exports to the NICs in 1996, with exports to Taiwan slowing down since 1992. North America absorbs 70% of South Africas manufactured exports destined for the Americas. The growth of exports to Ca

40、nada has been quite significant_18.5% per annum from 1992 to 1996. Two categories, basic metals and chemicals, and rubber and plastics, together make up more than 60% of total exports to this region. The significant increases in exports recorded for clothing, textiles, leather and footwear, and tran

41、sport equipment, could reflect niche marketing successes by South African exporters. However, the post-sanctions effect should also be taken into account.Other regions that are beginning to feature more prominently in South Africas trade profile are Latin America, Central Asia and Oceania. In Latin

42、America, Brazil has shown a 50% increase per annum in imports from South Africa since 1992; the major categories are basic metals, chemicals, rubber and plastics, and food, beverages and tobacco. This trend suggests that this region presents a particular opportunity to South African exporters.In the

43、 central Asian region, exports to India have increased significantly and India shows much potential as an export market for South Africa. Exports to India are concentrated in basic metals, chemicals, rubber and plastics, metal products and machinery, paper and printing, and textiles, clothing, leath

44、er and footwear. Exports to Oceania are growing at 36.5% per annum (1992_1996). Although this is a very small export market for South Africa (2.5% of total manufactured exports), the growth potential should not be underestimated in chemicals, rubber and plastics, metal products and machinery, paper

45、and printing, and transport equipment.South Africas market access: A select reviewThe trends in South Africas export performance indicate that manufacturers are gaining access to markets in both developed and developing countries. It is still true that material intensive products, such as basic meta

46、ls, chemicals and paper, dominate. Diversification of manufactured exports is gaining momentum, and the growth in exports further up the value added chain (transport equipment, for example) indicates that progress is being made in industrial restructuring as well as firm-level productivity, and tech

47、nological and efficiency improvements. In addition, diversification of destinations for manufactured exports is encouraging. While traditional trade links still dominate, growth of exports to some of these markets is slowing down significantly (for example, the European Union). By contrast, non-trad

48、itional trade links are strengthening, in particular with the African continent.The growth of specific downstream sectors, such as clothing and textiles, leather and footwear, and automobile components, in markets in the European Union and North America indicates opportunities for higher value added

49、 products to specific market niches in these regions. The development of non-traditional export markets offers opportunities, as the growth in exports to African countries beyond southern Africa has indicated. It is in these markets that South Africa is likely to find comparative advantage and these

50、 opportunities should be pursued. Recent talks with India, for example, also augur well in this respect.After years of exclusion from all privileged access that developed countries offered their developing country counterparts, South Africa has more recently gained preferential access through the ge

51、neralized system of preferences (GSP) to the European Union, Norway, Hungary, Japan, Canada, the United States and Switzerland. Access to EU marketsThis discussion of South Africas access to EU markets is based on the situation prior to the conclusion of the free trade agreement (FTA) with the EU. T

52、he conclusion of the FTA on 24 March 1999, together with details of its content and implications, is discussed in Section 4.Tariff structure. The EU tariff structure, with its many special provisions, free trade agreements and exemptions, is quite complex. For purposes of this analysis, only ad valo

53、rem tariffs are considered; this means that quotas, license requirements and other non-tariff barriers are ignored. The GSP and Super GSP Schemes have broad country coverage. However, more favourable preferences are extended to those African, Caribbean and Pacific (ACP) countries that are covered by

54、 the Lom Convention, as well as Mediterranean countries (Algeria, Cyprus, Jordan, Lebanon, Malta, Morocco, Syria and Tunisia), which benefit from more favourable preferences under Euro-Mediterranean association or cooperation agreements.The tariff structure thus includes MFN rates, GSP rates, GSP ra

55、tes for least developed countries (LLDCs) and preferences for ACP countries, as well as individual arrangements with the Czech Republic, Hungary, Poland, Slovak Republics, Egypt, Jordan, Morocco, Syria, Tunisia, Algeria and Israel. The majority of the least developed countries are beneficiaries of t

56、he Lom Convention (superior access compared with GSP). Least developed countries for which GSP benefits are still of practical value are notably Afghanistan, Bangladesh, Bhutan, Kampuchea, Laos, the Maldives, Myanmar, Nepal and Yemen. The current GSP Scheme will be in force until 1999 (1 January for

57、 agricultural products and 30 June for industrial products).The range of European MFN tariffs is very wide; the maximum ad valorem tariff is 446.1%. The duty-free share of all tariff lines (based on the number of duty-free lines compared with the total 10,539 tariff lines) is 13.6%, which is evenly

58、distributed between agricultural and industrial products (13.5% and 13.6%, respectively). The highest tariffs occur in the agricultural chapters of the harmonized system (HS), reflecting the impact of the EUs protectionist Common Agricultural Policy; the highest agricultural tariff exceeds 400% and

59、79 tariff lines are higher than 100% ad valorem. These high tariffs are concentrated in Chapter 20 (preparations of vegetables and fruits), Chapter 2 (meat), Chapter 23 (residues from food industries) and Chapter 15 (animal and vegetable fats and oils). The average tariff is therefore quite significant for agricultural products: 23.4% over all agricultural tariff l