The four pillars of South African agricultural trade policy

1. The four pillars of South African agricultural trade policy Ron Sandrey, tralacand the University of Stellenbosch

2. This paper explores the concept of placing South African agricultural trade policies into four ‘pillars’. • These pillars are unilateral (what you do yourself), • bilateral (between you and another party directly), • regional (what happens between a group), and • multilateral (what happens when all parties are involved).

3. Unilateral • South African agriculture is lightly protected (OECD measures) • But some sectors with tariff protection (beef) • And many tariff rate quotas (TRQs)

4. Bilateral • TDCA with Europe • Largely Duty-free trade by around 2010-2012 Except for many agricultural products (and vehicles into South Africa) • Blur here with regional policies for SACU Imports

5. Regional • SACU – new 2002 agreement – major implications • SADC – 2008 FTA (??) – one-way free trade now for imports into SACU • SACU – Mercosur – very little impact • SACU – EFTA – also little impact, as EFTA agriculture is not included

6. Multilateral • World Trade Organisation (WTO) • South Africa and the Uruguay Round – little effect as (a) unilateral reforms were way ahead and (b) little effect on opening South African agricultural export markets

7. Lets look at ‘South Africa’s way ahead’

9. Unilateral • Domestic supports and border protection generally low • Limited ‘Policy Space’ for increasing tariffs (tralac look at this on web and in the book) • There is room for more direct support – but it MUST be carefully targeted • Consideration of SACU Agreement

10. Bilateral and Regional – these are blurred • Economic Partnership Agreements (EPA) for African Caribbean and Pacific (ACP) now merging into a SADC (SACU)/South African TDCA for tariffs. This should (in theory) give South Africa some power for agr access in Europe. • Tralac analysis suggests that there was a lot ‘left on the table’ for agr in the TDCA • BEEF is the big issue (plus sugar)

11. the TDCA • The TDCA – limited EU tariff reductions in agr products • In the agricultural sector South Africa increases exports to the EU by $177 million - but trade diversion of $29 million. Thus, $148 million of this agricultural trade is new trade. For imports, increase from EU of $128 million ($64 million ‘other foods’ and $23 million dairy products) - but $50 million is trade diversion. • Half way point • Overall solid gains to South Africa & EU

12. Bilateral –regional continued with FTA analysis • India-Brazil-South Africa (IBSA). Some increased agr exports to India, and some increased imports from Brazil • China - some increased exports (sugar) and very minor changes to agr imports. Clothing the big issue. • Japan – solid increases in agr exports (maize) • USA – sugar and oilseed exports. Marginal imports

13. Doha agr outcome • Doha - Solid world-wide gains • But mostly in non-agriculture and (very) modest in agriculture • $48.2 Billion total, $3.2 Bill in agriculture • South Africa agr - only $37 m from $223 m total • South Africa gains in beef and sheep meats and in dairy exports • Why ‘modest only’ gains? Actual proposals are not that rigorous, influence of “special” and “sensitive” products is very significant and allows countries to ‘hide’. Developed versus Developing countries. • Plus Bound versus Applied tariffs in agriculture

14. Some trade agricultural data in the back of the paper • Next project – Agriculture, South Africa and China: the opportunities and threats. This to include detailed data analysis and modelling, looking at both offensive and defensive interests and competitor factors. We will also examine non-tariff measures. • rons@tralac.org and www.tralac.org • Thanks (and the All Blacks will rise again)