South Africa is interested in strengthening trade relations with developing country partners and is articulating a strong ‘Look East’ policy. Trade links with China and India seem to be high on the agenda. This is important in the context of the Southern Africa Customs Union (SACU) too. South Africa is the largest and most developed country in this customs union, and its preferences are likely to influence SACU’s trade agenda. This book assesses the potential impact of a free trade agreement (FTA) between South Africa (SACU) and China, and an FTA with India. These are two very fast growing developing countries which are also important sources of foreign direct investment in Africa. The two FTAs are likely to deliver very different impacts, and to raise important policy questions for South Africa and SACU.

The focus of this book is on South Africa’s trade relationship with China and India. We note at the outset that, as a member of the Southern African Customs Union (SACU), South Africa does not articulate an independent trade policy, but determines a common external tariff together with its SACU partners. Nonetheless, South Africa’s trade policy stance can be expected to play an important role in SACU’s trade policy, given that the South African economy dwarfs the collective economic power of its SACU partners.

This book provides much needed input to trade policy analysis for South Africa and, by implication, for SACU too. The trade modelling work builds on that developed in an earlier tralac monograph, ‘South Africa’s Way Ahead: Trade Policy Options’. South Africa’s gold exports to India add an important dimension to the impact of an FTA between these partners, while, of course, China’s manufacturing exports to South Africa and concerns about sensitive sectors such as clothing and textiles raise industrial development questions for South Africa.

© 2008 Trade Law Centre for Southern Africa, Tru-Cape Fruit Marketing (Pty) Ltd and the National Agricultural Marketing Council (NAMC)

Publication of this book was made possible by the support of the Trade Law Centre for Southern Africa (tralac), Tru-Cape Fruit Marketing (Pty) Ltd and the National Agricultural Marketing Council (NAMC). The views expressed by the authors are not necessarily the view of any of these institutions.

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