Cape exporters take stock of changing global political landscape

As the world
digests the
reality of
a Trump
presidency, shippers in
the Western Cape are
taking stock of the possible
impact on exports to the
US.
“South Africa currently
benefits significantly from
increased market access to
the US under the African
Growth and Opportunity
Act (Agoa) – and changes
to the agreement would
hike tariffs for Western
Cape exporters, leading
to a serious loss of
competitiveness in this key
market,” said Alan Winde,
minister of economic
opportunity in the Western
Cape.
The US has been on
the Western Cape radar
for some time. In 2014
South African exports
to the market totalled
approximately R68 billion,
7% of South Africa’s total
exports. The United States
was the Western Cape’s
5th largest global export
market in 2015, valued
at R6.8 billion. Western
Cape exports to the United
States grew by 5.7% in
2015 and by an average
annual rate of 16.5%
between 2011 and 2015.
“It is an extremely
important market to the
province,” said Winde,
adding that ongoing efforts
were under way to establish
a direct route between
Cape Town and the US.
There’s also uncertainty
around the impact on
the local economy of the
UK’s planned exit from
the European Union,
more commonly known as
Brexit.
“The Southern African
Development Community
(SADC) only last year
concluded an Economic
Partnership Agreement
(EPA) with the EU to
promote, amongst other
things, ease of trade
between the two regions.
Brexit means that the UK
will not form part of this
agreement,” he said.
It still remains uncertain
if the UK will establish a
similar agreement with
South Africa when it exits
the EU, but many trade
specialists agree that the
establishment of these
agreements is complex
and takes time. The EPA
took nearly ten years to
conclude.
“We have from a Western
Cape point of view – in
partnership with Wesgro,
the provincial tourism,
trade and investment
promotion agency –
decided to develop a
strategy to respond to the
possible impact of Brexit,”
said Winde.
At the time of going to
print this strategy was not
yet available.