Keyword

Trade complementarity, Revealed trade barrier index, Trade intensity.

Abstract

South Africa’s trade was examined for the period 2001-2021 to give insights into current trade with Africa as this has implications for its trade in the African Continental Free Trade Area (AfCFTA). The structure of goods traded, trade complementarity, ease of market access, trade intensity with regional groups, and its trade integration dimension with Africa were examined. Results show that (i) Africa is an important market for South Africa’s manufactured products with greater skill and technology content and there is ease of market access for these products into African markets; (ii) its trade with Africa is highly complementary; and (iii) it has strong trade linkages with Africa’s regional groups. This is a foundation which South Africa would utilise to consolidate, broaden and strengthen its trade in the AfCFTA because (i) more complementary trade opportunities would emerge which could be harnessed in addition to current opportunities; (ii) African markets would open up more as trade barriers are reduced further, allowing products more access; (iii) current trade linkages with regional groups would strengthen as trade barriers are reduced, thus broadening the scope of South Africa’s trade in Africa; and (iv) regional value chains and production clusters initiatives would arise as market access improves and new and dynamic areas of comparative advantages emerge. The AfCFTA offers opportunities for countries to tap into under-exploited export markets in other countries and to import cheaper inputs. However, there are challenges in accessing and utilising such opportunities due to (i) non-tariff barriers like transport infrastructure; unharmonised trade facilitation, documentation, and procedures; and limitations in institutional capacities to implement trade facilitation measures..


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