The latest geopolitical trade developments did not spare the already ailing SA economy.
The devastation in export markets, job losses and inflation are but some of the inevitable economic woes our shores will have to navigate. The uncertainty in export markets and estimated loss of more than 30,000 jobs surely calls for decisive and collaborative action between industry players, regulators, government and policy influencers.
SA is among the emerging economies that were slapped with the highest tariff rates by its third-largest trading partner, America.
In a joint statement issued by the ministers of the department of international relations & cooperation (Dirco) and the department of trade, industry & competition (DTIC), articulating SA’s response to the devastating unilaterally imposed tariffs, government said exporters have to work smarter to be competitive.
“The new tariffs may require exporters to co-ordinate their activities in relation to developing joint infrastructure for exports, sharing of market information and co-ordination of activities to achieve economies of scale and efficiencies that enable them to be competitive,” they said.
Industry players and stakeholders now have until Thursday to submit comments on the draft Block Exemption for the Promotion of Exports 2025 that was published by DTIC minister Parks Tau for public comment. The draft block exemption was published on August 12 in the government gazette after consultations with the Competition Commission.
A block exemption is a legislative tool aimed at facilitating and enabling co-ordination or co-operation in an industry or sector that would otherwise constitute a contravention of the Competition Act, for public interest purposes. The published draft block exemption forms part of a series of measures introduced by the DTIC for companies impacted by the imposition of 30% reciprocal tariffs on SA exports.
The purpose of this draft block exemption is to mitigate the economic impact of the increased tariffs and to contribute to the resilience and growth of SA exports. It allows for co-ordination in seven categories of agreements or practices in export markets only, and these are:
- Co-ordination aimed at achieving economies of scale and efficiencies in the export markets with the object of improving the competitiveness of SA export products;
- Co-ordination on sharing or offsetting the landed costs faced in the export markets;
- Co-ordination on joint financing and development of infrastructure required for export destination,
- Co-ordination on funding and sharing export related market information, including information on import regulations and product regulations in the export markets;
- Co-ordination on sharing the cost of shipment, storage, inspection rooms, freight, insurance and other logistics in the export markets;
- Co-ordination on the collective marketing of SA goods as a brand in the export markets; and
- Co-ordination on the joint negotiation of export programme protocols and compliance with quality specifications or standards of goods in the export markets.
The block exemption is for a period of five years and can be extended by the minister after consultation with the commission, taking into account tariffs in the export markets.
Stakeholders, trade experts and industry players should submit written comments to the DTIC on the proposed draft block exemption before the Thursday deadline.
Email comments to Dr Ivan Galodikwe at lGalodikwe@thedtic.gov.za
*Makunga is the spokesperson for the Competition Commission of SA
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.