South Africa could strengthen its trade ties with China through an economic partnership agreement that could pave the way for tariff-free exports to China.

An economic partnership agreement signed by Parks Tau, Minister of Trade, Industry and Competition, during his visit to China could open the door to tariff-free exports to China, the government announced on Friday.

South Africa is seeking to expand its export opportunities amid strained trade relations with the United States, which is its single largest bilateral trading partner after China.

US President Donald Trump imposed a 30% tariff on South African exports to the United States in August last year, the highest rate applied to any country in Sub-Saharan Africa.

Mn a statement issued on Friday, the Department of Trade, Industry and Competition (DTIC) said Tau and his Chinese counterpart, Minister of Commerce Wang Wentao, had signed a “framework agreement on economic partnership for shared prosperity”.

This will be followed by an “early harvest agreement” by the end of March, which could include granting South African exports tariff-free access to China, according to the statement.

China said in June last year that it would remove all tariffs applicable to the 53 African countries with which it has diplomatic relations. This followed Trump’s move to begin announcing tariffs on various countries around the world.

Kenya, East Africa’s largest economy, already concluded a provisional trade agreement with China last month.

Also read: ‘SA, wake up, and seize greater export opportunities to China’

New Export Opportunities for Local Producers

Closer trade ties between South Africa and China will create opportunities for South African businesses looking to enter the Chinese market, particularly in sectors such as agriculture and mining, according to the DTIC.

Tau says government will negotiate the agreement in a way that protects South Africa’s industrial capacity.

“We look forward to attracting even more Chinese investment into South Africa, and also to introducing many South African products to the Chinese market.”

Source: Reuters