Introduction
Trade policy is a central feature of the South African government’s economic policy. In the
early years of the transition to democratic rule it was widely debated. This debate receded
recently, but is returning to centre stage as government’s trade negotiators tackle a series of
significant negotiations.
Yet trade policy is generally not well understood outside of the small circle of practitioners
and thinkers involved in its formulation. Partly this arises from its ever-increasing scope.
Entrenched ideological positions and associated misconceptions are also partly to blame. At a
time when trade policy is returning to the center-stage of South Africa’s economic policy
debate, it is necessary to remind ourselves where we stand on these issues, and chart possible
future directions. This paper is intended to be a small contribution to that process.
Section Two assesses a stylised debate between ‘free-traders’ and ‘protectionists’ in light of
various strands of academic theory. It concludes that trade liberalisation is generally good for
promoting competitiveness and that the latter is essential in a globalising world. However,
this conclusion is hedged with the caveat that limited time-bound protection may be
appropriate under certain circumstances arising predominantly from issues of social
harmony.
Section Three assesses government’s trade policy by looking at the thinking of the
Department of Trade and Industry, the main formulator and implementer of trade policy in
South Africa. It reviews the entire web of trade policy formulation and synthesises recent
evaluations of its impact. In doing so, possible future impacts and new directions are
identified.
The concluding remarks summarise the central argument in this paper in light of South
Africa’s experience with trade policy. Essentially, it is argued that whilst significant
liberalisation has taken place since 1994, there is scope to undertake substantial further
liberalisation. This should be seen as beneficial in its own right, to the extent that it actually
occurs, but will to some extent be forced on us in any event. Therefore government’s current
strategic approach finds support in this paper, although it is debatable whether this goes far
enough.
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