Economic development

How SA’s foreign policy can affect trade

Trade advisor Donald MacKay has warned that South Africa’s apparent support for Russia, despite its invasion of Ukraine, could affect South Africa’s exports to the United States, the European Union and Britain.

Mackay says South Africa’s foreign policy has become pro-Russia “and no one thinks we’re non-aligned” as the government claims. South Africa’s stance on the war in Ukraine is being closely watched by Ukraine’s allies, particularly the US and the EU.

“The EU, the biggest economic bloc in the world, accounts for 22% of our exports and the USA, the world’s biggest single economy, accounts for 9%. Add the UK (7%) and we export 36% of everything to those three regions. Russia accounts for 0.23%.”

South Africa’s trade with those regions could become gradually more difficult. Mackay says South Africa’s huge benefits under the Agoa trade agreement could be reduced when it comes up for renewal in 2025. In a worst case scenario, South Africa could be expelled and lose all benefits if a Republican becomes US president in 2024.

Trade with the EU could also become more difficult, despite the protection given by the EU-SA trade agreement. “We may find it takes very long for the newly negotiated improved access to things like wine to materialise. And expect more varieties of the false coddling moth problem, which currently plagues our citrus industry, to persist.”

MacKay’s warning comes just as South Africa’s poultry industry is gearing up to export chicken to the EU. Approvals are awaited for cooked chicken exports, and more difficult negotiations lie ahead to secure access for raw chicken breasts, which command premium prices in the EU.