new trade policy statement, outlining government’s objectives for international trade in the wake of the Covid-19 pandemic, has a strong focus on imports.Recently published by the Department of Trade, Industry and Competition (dtic), the document highlights the importance of fair competition between domestic and foreign producers, while also emphasising the need for stricter rules for imports to eliminate illicit trade.“In fashioning the economic recovery, we need to avoid a return to the “crisis before the crisis” and to build back better, including by restoring a more appropriate and sustainable balance between the objectives of trade growth and national industrial development,” reads the statement. “Covid-19 has also highlighted the need for more resilient production systems and a degree of “strategic autonomy” in the international production and trading system so that countries have the policy space to diversify their economies and add domestic value to production and exports.”According to the dtic, while imports can lower input costs and provide access to a range of products, trade is double-edged, as durable improvements in living standards demand that domestic production and markets expand as well. These complexities require a carefully calibrated, balanced and strategic approach to trade.Michael Lawrence, executive director of the National Clothing Retail Federation of South Africa, says the private sector is completely onboard when it comes to decreasing imports and increasing the acquisition of goods and services from local producers.“In the private sector, we have created local content ambitions. In the clothing and textile sector, for example, we have a master plan that has the goal of increasing local content sourcing from around 30% to over 60% over the next ten years.”To r e a c h this goal, however, several technical, systemic and regulatory changes would be required.“Our approach is that localisation is important, but it is also important to understand that no economy has ever been successful in sourcing clothing products 100% from inside its own borders,” he told Freight News.According to the dtic, South Africa has a comparatively small and open economy, accounting for 0.53% of world merchandise trade and approximately 0.28% of world services trade. International trade in goods and services is 60.4% as a percentage of GDP. Import growth has, to date, tended to outstrip exports, resulting in a persistent deficit in goods trade.“This was particularly evident in the period from 2000 to 2008 when SA enjoyed strong GDP growth. Since 2009, growth in SA has been subdued – and while the trade balance has f luctuated year-on-year, trade in manufactured products is consistently in deficit.”South Africa recorded its biggest trade surplus on record last year, largely off a sharp reduction in imports due to the economic downturn. Imports account for 25% of GDP in the country.While imports can lower input costs, to improve living standards domestic production must also expand.– dtic