The SADC-EU Economic Partnership Agreement – Potential Export Opportunities for South Africa Joint research study

The European Union and South Africa enjoy a unique strategic and preferential economic relationship that is embedded in the SADC-EU Economic Partnership Agreement, but includes cooperation across a much wider set of social, environmental, industrial, developmental, and security-related matters. The strength and impact of these economic and political relations is reflected in the deep linkages between companies and industries in the EU, and South Africa.

Whereas exporters in both the EU and South Africa have undoubtedly benefited extensively from the EPA, there may still be untapped opportunities to increase existing trade, or to unlock potential new opportunities to expand trade between the two partners. Changes to the world economic environment – as a result of Brexit, COVID and other factors – may also contribute to significant shifts in global trading patterns. To explore these possibilities and to identify specific products or value chains for priority outreach and support; further and updated analysis is needed. For these reasons, the EU-SA Partners for Growth Programme funded a joint research study, in collaboration with government and private sector stakeholders in South Africa and the EU.

The main objectives of this study were:

  1. To review recent structural developments of trade between South Africa and the EU.
  2. To identify “realistic export opportunities” for South Africa in individual EU markets.
  3. To map these opportunities to specific provinces and municipalities in South Africa where relevant.
  4. To share the findings with government and business representatives in South Africa and the EU.

The study was guided by a small Steering Committee consisting of stakeholders from government (specifically the Department of Trade, Industry and Competition (DTIC) and the Department of Agriculture, Land Reform and Rural Development (DALRRD)) decision makers in South Africa and the EU.

This particular study is aimed at identifying and creating awareness of realistic export opportunities to EU-27 partners, over and above the ‘usual’ suspects. South African policy makers and relevant private sector stakeholders can use the outcomes of this study to focus attention on the mix of products and markets within the EU-27 group to create new exports to these markets, or capitalise and grow existing exports to these alternative destinations.

The outcomes are categorised into 3 different groups that inform and facilitates the development of potential strategies to employ in realising these opportunities.

These are:

  • Short term export promotion focus – opportunities consisting of ‘mature’ export products (from a South African perspective) and existing (but with ‘untapped’ potential) as well as ‘new’ markets within the EU-27 group of countries (referred to as ‘intensive margins’ in both product and market context)’;
  • Medium-term export development focus – less ‘mature’ export products combined with ‘new’ markets (referred to as intensive margins in the product context, while being extensive in the markets context); and
  • Longer term export investment and development focus – potentially ‘new’ products (but which are related to capabilities within the mature group identified as short term opportunities) and ‘new’ markets for such products (referred to as extensive both in product and market terms).

The outcomes are summarised in this report according to 3 perspectives, namely

  1. from an EU-27 partner country as well as aggregate economic sector perspective;
  2. from a South African master plan grouping perspective; and lastly
  3. from a South African provincial and district perspective.