As the euphoria of trade liberalisation is being replaced by hard and realistic analysis, a worrying feature is that the gains from comprehensive liberalisation are being reduced. This is especially so for the southern African region, as factors such as the loss of preferences into richer markets and the non-compensated losses from tariff revenues in the smaller Southern African Customs Union (SACU) states are being examined in detail.

A particular feature for South Africa is the issue of liberalisation impacts upon the protected clothing and auto sectors, and that is being brought to the fore with talks of a Free Trade Agreement (FTA) between China and SACU and the US and SACU respectively. Here, analysis suggests a potential cost to both sectors, and for the clothing sector with China adjustment costs on a par with global liberalisation but without the widespread compensatory gains that global liberalisation may bring to other South African sectors elsewhere.

Complicating both current and future clothing sector policies in South Africa is the potential impact upon Lesotho’s similar sector, with the difference here being that rather than an import substitution issue there is an almost total reliance in Lesotho upon a narrow range of clothing exports almost exclusively to the US.

This is not to say that South Africa must shun trade liberalisation; it is to say that the Republic must carefully examine all the issues involved before committing to further trade agreements. Additionally, it must recognise its new responsibilities, both legal and moral, under the new SACU agreement in this area of trade policy, in both industrial policy and tariff revenues. By examining in minute detail actual and potential trade agreements with respect to a select but important sub-set of processed fruit, vegetable and nut exports we are able to glean considerable information that will be of interest to both exporters and policy makers.

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