Parks Tau’s ‘Plan A’ turns to new markets to outrun Trump’s trade war

South Africa has offered easier market access for American blueberries, poultry and pork in a revised trade offer to the US Trade Representative on Tuesday, 12 August. In a fortnight, container-loads of the exports will hit the waters from Georgia, South Carolina, North Carolina and Alabama from three American ports.

This is the cornerstone of a multi-pronged revised offer that SA hopes will stave off punitive tariffs of 30% that are steadily being implemented, and which have already cost jobs and contracts. 

Read more: Trump tariffs jeopardise future of decades-old Nelson Mandela Bay engineering firm

Will it be enough to see off the trade war from truculent US President Donald Trump? It’s unlikely, although a sharpened talks team will go to the US to walk through the revised offer.

Trade Minister Parks Tau and Agriculture Minister John Steenhuisen, along with new trade attachés and negotiating teams, will jet off to Asia and the Middle East to bolster new markets primarily for SA’s fruit exports and motor cars – the casualties of the sky-high US tariffs.

South Africa is now exporting apples to Thailand after a 16-year hiatus, an example of what new trade routes may look like. Steenhuisen said a beachhead had been opened with China, open to negotiations on access for five kinds of stone fruit, avocados and citrus once the black spot restriction is solved.

The avo industry in Limpopo is so resilient, Steenhuisen revealed, that it believes it can still be competitive even at a 30% US export tariff. He also said SA was in negotiations for biofuels and wine exports.

Market access talks are open in Vietnam and Japan (for wine, citrus and possibly ship-building exports). The Middle East is a key target with state visits to and from Qatar, the UAE and a wider number of Gulf countries scheduled for later this year.

“This is not a Plan B; it is a Plan A for long-term resilience and competitiveness,” said Tau at a briefing on the new trade offer. While Asia and the Middle East offer bigger markets, the obvious trading partners are on our doorstep.

Read more: We’ll adjust to the game, says the citrus industry as Tau, Steenhuisen target new markets

With the African continent forecast to grow at above 5% this year (albeit off a low base), the most significant opportunities are through the African Continental Free Trade Area and with the EU, still SA’s largest trading partner, and China.

The government also wants South Africans to buy cars, clothes and other manufactured goods made locally to grow domestic demand. 

The enhanced trade offer to the US was made as part of the Southern African Customs Union (Sacu) bloc of SA, Botswana, Eswatini, Lesotho and Namibia.

“The imposition of reciprocal tariffs by the US has created substantial obstacles for Sacu member countries, pressure on vital industries and employment. Although there are ongoing efforts to secure exemptions and expand trade relations, this situation highlights the susceptibility of smaller economies to global policy shifts,” said the Trade and Industrial Policy Strategies think-tank.

Non-disclosure agreements govern trade talks, so the South African team may not have disclosed details, but key deals are missing from the revised offer made public.

In July, Tau included the import of 750-1,000 petajoules of LNG for 10 years; SA foreign direct investment into the US of $3.3-billion in mining and metals recycling, and the exemption of specific sectors from reciprocal tariffs, including ship-building and counter-seasonal agricultural trade in citrus and other fruit. DM

If you wish to comment on this issue, please send an email to letters@dailymaverick.co.za

Letters will be edited.