At the Subtrop Marketing Symposium in White River on 5 November, Moloko Leshaba of the Department of Trade, Industry and Competition’s Chief Directorate for Bilateral Trade Relations cautioned that South Africa must urgently diversify its export markets to address rising global risks.

By Jasper Raats, senior journalist at African Farming and Landbouweekblad

He said the global trade order has changed dramatically since the Covid-19 pandemic, with countries increasingly turning inward and protecting their own industries. Major economies, including the United States and the European Union, are now using so-called environmental measures such as carbon taxes and technical trade barriers to shield domestic producers.

“The rules-based multilateral trading system has begun to crumble,” Leshaba said. “Developed countries are talking about re-industrialisation, and developing countries must adjust their industrial policies quickly to survive.”

Leshaba stressed that South Africa’s domestic market is too small to sustain long-term growth. “We depend on exports. Without exports, no local manufacturer can survive,” he said, referring to the automotive sector where only about a quarter of locally manufactured vehicles are sold in the country.

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Africa vs America

Leshaba highlighted government’s strategy of export-driven industrialisation and deeper integration with the African Continental Free Trade Area (AfCFTA). “The AfCFTA transforms a market of 64 million consumers into one of 1,3 billion. This is our biggest opportunity to grow exports and create jobs.”

At the same time, he warned against becoming too dependent on a single major customer or market. “If that customer runs into financial trouble, you go down with them. Diversification is essential – in both products and markets.”

On the United States, Leshaba said that the import tariffs recently introduced are putting growing pressure on South African exporters. “The so-called reciprocal tariffs are not truly reciprocal – certain US sectors still enjoy preferences, whereas our products face levies of up to 50% on steel, copper and timber.”

South Africa, however, has adopted a non-confrontational approach in negotiations with the US. “Instead of retaliation, we are focusing on dialogue, new markets, and strengthening our export-support offices to help producers find alternative buyers,” he said.

Also read: Why SA’s agricultural export growth depends on rebuilding lost trade expertise

New framework for the US

Leshaba confirmed that government is currently considering a new framework for trade negotiations with the US after the recent expiry of the African Growth and Opportunity Act (AGOA). “We expect an AGOA extension to be confirmed soon, likely for a shorter period to encourage bilateral discussions.”

He believes the future of South Africa’s agricultural and industrial exports lies in building new partnerships quickly – in Africa, Asia and South America – and equipping local producers to adapt to a changing global market. “Diversification starts with the producer. Government’s role is to enable market access,” he said.