In light of the current US tariff challenges, Wandile Sihlobo, chief economist at Agbiz, says that the country’s agricultural sector must play the long game: prioritise national interests, strengthen global trade relationships, and continually seek out new export opportunities. Here’s why.
It is increasingly clear that South Africa will need to strengthen its trade relations with the US in light of the current tariff difficulties while also attempting to deepen trade with China. After all, these are both South Africa’s leading trade partners.
China has recently stated that it will oppose any country negotiating trade deals with the U.S. at its expense.
Now, this may not apply to South Africa, as we are not looking to resolve our challenges with the U.S. at the expense of anyone.
However, I would argue that the essence of China’s comments highlights the broader point that South Africa should cultivate friendships with as many countries as possible and strengthen them with those countries. I suppose we can learn something from India, which appears to be friendly with many countries.
To underscore a point I have made here previously, it is rather that we have a naked national interest – prioritising South Africa – and not be distracted by much else.
But what would such an approach look like for the agricultural sector?
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New markets, old friends
The first thing to underscore is that South Africa’s agricultural sector is export-oriented, with exports reaching a record US$ 13.7 billion in 2024, up 3% year-over-year. The export markets and products are varied, with the African continent absorbing nearly half, while the EU, the Middle East, Asia, and the UK are also sizable markets. Maintaining warm relations with all these regions is key for our agricultural sector.
I must say that the EU-South Africa agricultural trade has had a few frictions, mainly related to citrus. I get the sense that there is a growing sentiment among EU farmers that the region must manage its imports and protect domestic producers. I don’t believe EU policymakers would respond to farmers’ needs by imposing tariffs or stronger policies that discourage imports.
Therefore, in such important and yet sensitive markets, South Africa must continually strengthen relations and reaffirm the importance of the EU to our agricultural sector. Maintaining openness and friendship with the EU is crucial and essential for maintaining access to South Africa’s agricultural exports in this region.
Also worth noting is that the Middle East promises more potential for expansion, and there are no domestic competing farmer interests in this region. While a significant share of South Africa’s agricultural products are already exported to the Middle East, the presence of South African agriculture in this region is arguably still peripheral. A more robust promotion and securing of trade deals with this region is key, especially with countries such as Saudi Arabia, the UAE, and Qatar.
Equally, South Africa must work to maintain its current access to agricultural products and other goods in the US market. This will entail an attempt to find a path for better trade terms after the 90-day pause that we are currently in.
The African continent, which remains a key anchor for South Africa’s agricultural exports, also requires ongoing engagement to strengthen relations. This is ideal for avoiding the friction we observed with the vegetable export ban in Botswana (now resolved and reopened), Namibia (where restrictions have not been lifted), and the banana trade issues with Tanzania.
In essence, South Africa should adopt a long-term vision and recognise that its agricultural growth relies on stronger relationships with various countries. This includes continuously engaging various markets that we export to while continuing to search for new markets for diversification.
The government should lead these efforts in collaboration with businesses to continually open export markets for the agricultural sector. In these times of trade fragmentation and geopolitical tensions, building and strengthening friendships is key.
- Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of South Africa. The views and opinions expressed in this article are those of the author and do not necessarily reflect the views or positions of Food For Mzansi.
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