South Africa dropping the ball with China, India, Japan and the Middle East
South Africa faces an uphill battle in trade negotiations with other countries, with a thin list of free trade agreements and an unclear strategy for where to make inroads.
On Wednesday (26 August), the Department of International Relations and Cooperation (DIRCO) announced plans to deepen economic ties with Brazil.
It said that South Africa is seeking a more balanced and diversified trade with Brazil, while working to remove trade barriers and expand market access on both sides.
According to Business Leadership South Africa (BLSA) CEO, Busi Mavuso, this appears to be more a political move than an economic one, as Brazil is actually a competitor.
Added to this, she noted that South Africa runs a significant trade deficit with Brazil.
In 2025, South Africa exported R5.2 billion worth of goods to Brazil but imported R27.3 billion worth, leaving a deficit of R22.1 billion.
Given that the meetings with Brazil were led by DIRCO rather than the Department of Trade, Industry and Competition (DTIC), Mavuso said this was a political conversation, not an economic one.
“South Africa needs a serious trade strategy – one built on analysis of where we can actually compete, not on the optics of summits,” she said.
“Brazil is a case study in why getting this wrong might be costly.”
Mavuso said that trade agreements involve reciprocity, and an agreement can backfire if reciprocal access arrangements result in South Africa’s industry being negatively affected by a flood of cheap imports.
Regarding Brazil, she added that the two economies have significant overlaps.
This includes sizeable automotive, mining, agro-processing, renewable energy, chemicals and pharmaceuticals industries.
Given the massive trade deficit, a move towards free trade between the two countries would likely benefit Brazil far more than South Africa.
“We don’t know what the supply response would be to free trade. No serious modelling of the bilateral supply response has been published,” she said.
“Before any agreement is advanced, that analysis must be commissioned and made public.”
South Africa has weak trade agreements all over
Mavuso said that, in general, South Africa should seek free trade with countries whose economies differ from its own.
For example, many countries in the Middle East lack South Africa’s manufacturing base and need goods such as its agricultural exports.
“We tend to import oil and other petrochemicals, which we don’t produce much of domestically. So, there is potentially a high payoff to both parties to free trade,” she said.
She added that South Africa’s list of free trade agreements is currently rather short, with the country not signing a new agreement since the post-Brexit UK.
The country’s existing economic partnership agreement with the United Kingdom is an example of a positive trade agreement, she said.
South Africa imported R117.8 billion from the UK but exported R179.1 billion—a healthy trade surplus of R61.3 billion.
However, outside of this, South Africa hasn’t made much progress.
“We actually have a poor set of free trade agreements,” Mavuso said. “Negotiations with India have dragged on for many years, but have not led to anything.”
“There are no free trade agreements with key markets like China, India, Japan, Korea or blocs like the Association of South East Asian Nations.”
She noted that Japan is worth examining in particular, as it is one of four regions, along with Europe, the US, and Southern Africa, with which South Africa consistently enjoys healthy surpluses.
This suggests competitiveness and scope to leverage existing strengths, relationships, and investment.
Mavuso said that South Africa’s trade agreement portfolio is among the thinnest for an economy of its size, and that fixing it is not complicated.
However, this requires effort by both government and business, and a clear methodology for assessing where the country can compete.
Underpinning this is a coherent policy and strategy, founded on a clear logic and analysis of what is actually in the country’s economic interests.
“Our exporters deserve more than announcements of intended deals, dressed up as progress, while the underlying work hasn’t been done,” she said.
Loading ...