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South Africa Summary


Though South Africa was a founding member of the General Agreement on Tariffs and Trade (GATT), it participated little in trade negotiations as long as its government remained embroiled in domestic conflicts. Following the end of apartheid in 1994, however, South Africa began to actively voice the concerns of developing countries in the WTO. It now considers the Doha Development Round of world trade talks to be essential for accelerating development and increasing the scope of the developing world to bargain on its key issues.

Free-trade Areas and Bilateral Negotiations

South Africa, Botswana, Lesotho, Namibia, and Swaziland are the members of the South African Customs Union, the oldest customs union in the world. SACU was renegotiated in 2002 to create a more democratic institutional structure; a dispute settlement mechanism; and to require common policies on industrial development, agriculture, competition, and unfair trade practices.[1]

Though its priority is global trade liberalization, South Africa is generally open to a bilateral approach in order to achieve the same basic principle of opening up markets. This may be a less favorable option for its negotiations with stronger trading partners, however, in which case the multilateral framework would facilitate alliance-building among small countries for greater leverage. South Africa has arranged a free-trade area with the Southern African Development Community (SADC); but its 1999 free trade deal with the EU remains its most important agreement.[2]

By negotiating a new agreement with South Africa, the US hopes it will soon rival the significant trade advantage Europe now holds in the region. South Africa is also pursuing bilateral trade agreements with the EFTA states (Iceland, Liechtenstein, Norway, and Switzerland), while the entire SACU is negotiating with Mercosur (Latin American trading bloc), Egypt, India, China, Nigeria and others.[3]

The Group of 20

At the WTO ministerial meeting in Cancun in November 2003, South Africa led the coalescence of a new trade block of twenty articulate developing countries, along with India, Brazil, and China. The group came together over their insistence that they could not consider further lowering their import tariffs until developed countries, particularly the US and EU, committed to significantly lowering their subsidies of domestic agriculture production and export. The G20's rejection of the investment issues that the developed countries wanted to include in the negotiations and its insistence on prioritizing agriculture brought about the early ending of the Cancun meetings and has shifted the course of the Doha Development Round.[4]

Trade Related Intellectual Property Rights

Together with Brazil, South Africa has advocated for access to affordable medicines, coming up against the United States and other rich countries seeking to protect their pharmaceutical industries and the intellectual property rights they claim provide the incentives for the invention of new treatments. These developed countries reluctantly accepted a decision made at Doha in 2001 that, when public health was at stake, recognized the right of WTO members to dismiss patents on expensive Western drugs and make generics themselves. These generics, however, could only be used domestically and not exported. A country without a drug industry would be no better off, being able neither to make inexpensive drugs itself nor to buy them from another country.

This problematic loophole was resolved in September 2003 before the Cancun meeting in an agreement that set up a framework for parallel importing of generic drugs between developing countries. This promises to stimulate the generic drug industry in South Africa, as well as expand the current ones in Brazil and India. However, there are currently no plans in any country to issue licenses for generic production and export, perhaps due in part to the regulatory barriers and political pressures from developed countries that these generic industries still face.[5]


As a member of the Cairns Group of agricultural exporting economies, South Africa is eager to see the export of agricultural and food products to developed countries facilitated by the lowering of tariff and non-tariff barriers, the elimination of export subsidies, and the maximum possible reduction in trade-distorting domestic support. Like the rest of its developing country and agriculture-exporting allies, South Africa is highly critical of the U.S.'s agricultural export subsidies and especially the EU's Common Agricultural Policy (CAP), and has repeatedly highlighted these concerns in trade negotiations.[6]

Conflict Diamonds

Coined by the United Nations Security Council, the term "conflict diamonds" means rough diamonds used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments. South Africa continues to play a key role in the Kimberley Process, a campaign to exclude conflict diamonds from the legitimate trade by introducing a certification scheme. Based in Johannesburg, tasks of the process range from tracing diamonds held by customs officials around the world, to informing countries and organizations on how to join the effort. Most WTO countries have joined the 52-country membership of the Kimberly Process, but it remains a priority to engage all WTO members, thereby facilitating uniform regulation of the diamond trade.[7]


Despite its leadership in the African Union and the New Economic Partnership for African Development South Africa has failed to strike any similar alliance in terms of trading relations. Its positions in this arena often run counter to those of the Africa Group, which has protested for years that its countries could not afford to implement the existing trade agreements. Seeing its principal position as one of engagement in multilateral organizations, South Africa is instead working with the Cairns Group and the G-20.

South Africa is eager to move ahead in world trade negotiations in order to avoid the potential alternative scenario of increased bilateral agreements and further marginalization of poor countries. Hashing out South Africa and the rest of the G-20's demands on agriculture with the U.S. and EU's political considerations and economic strength will be the most challenging task for the remainder of the Doha Development Round.

Last updated April 2004

[1] 2003 WTO Policy Report on South African Customs Union,
[2] "SA Assured of Expanding EU Exports," Business Day 10 Dec 2003.
[3] "Customs Union, Americans Meet in Maseru," SAPA (South African Press Association) 3 May 2004.
[4] "Back To Business at WTO," Financial Express 17 Mar 2004.
[5] "No simple solutions at trade talks," Business Day (South Africa) 10 Nov 2003, pg. 8
[6] "Pressure on EU, US to Cut Subsidies," Indian Express 17 April 2004.
[7] "Kimberley Process Helps Protect Diamond Industry,"Africa News 29 Jan 2004.