Some of this is accounted for in the transport costs (iron ore) given that imports are valued at cost, insurance and freight (cif) and exports at Free on Board (fob), while another large difference is that there are almost no reported exports of platinum and diamonds from South Africa but these are major imports into China. Much remains unexplained.
'Trade chilling' suggests that there may be potential areas where South Africa could export to China and where an FTA could help.
By value the main potential export items from South Africa may be motor cars and aircraft (duties of 15 and 5 percent respectively), as these are both massive imports into China. Other lines include apples, apricots, pineapples and avocados, chocolate products and processed fish and meats in agricultural goods, titanium oxide and other ores, and some lines of iron and steel and other manufactured products in general.
Finally, an analysis of the so-called intra-Industry trade between South Africa and China shows that, as expected between two developing countries, these index values are low at about the 6 (out of a 100) level. This index compares trade between partners in like-products, and is a feature of trade between developed countries.
However, the more interesting feature is that these index values are steadily increasing from very low levels over the last ten years, suggesting an increasing sophistication in the trading relationship.
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Trade law centre for South Africa
marketing@alchempro.com
