In light of the changing global environment, where flexibility is key, the government has been urged to push for a review of the SA Customs Union (Sacu).
Agricultural economist Wandile Sihlobo believes some countries may be reluctant to engage deeply with South Africa on trade because of Sacu.
“To potential partners, the customs union often appears opaque and unpredictable. Many are interested in South Africa itself, not the wider region. Pretoria should therefore press for Sacu reform while preserving the development programmes that provide social support to neighbouring states.”
He says countries must be agile in forming new agreements that sustain their economies. “South Africa is on a path of export expansion, and when other countries see their interests aligned with South Africa’s, the government must be able to sign trade agreements.”
But this is not always the reality. South Africa generally has to consult with Botswana, Eswatini, Lesotho and Namibia, which are part of Sacu. And while in the past this practice worked well, it’s because there was no urgency and most trade matters took years to be concluded.
Negotiating as a customs union also ensured that countries interacting with the region could access a slightly larger market.
“But the world has changed, and each country must put its interests first,” says Sihlobo.
“For South Africa, unlike other countries in the region, there are pressures in key markets such as the US and a need to expand export markets as the domestic industry increases output across various sectors of the economy.
“Therefore, the pressure on South Africa’s policymakers and business leaders isn’t the same as in other countries in the region. Thus, South Africa must have the flexibility to move at its own pace in finalising trade matters.”
He believes the modern version of trade arrangements in this region should allow countries to enter into bilateral trade agreements with various partners while maintaining low tariffs within the bloc.
