Preferential trade agreement raises South African imports to Brazil

Shanaaz Ebrahim addressed opportunities for South African producers

South African exports to Brazil increased from US $ 483 million in 2017 to US $ 663 million in 2018. The information was revealed by the South African economic representative in Brazil, Shanaaz Ebrahim, during LAAD Defense & Security, the largest trade fair defense and security in Latin America, which took place in Rio de Janeiro.

According to the representative, the deficit of the South African trade balance for Brazil decreased from 1.2 billion to 700 million between 2017 and 2018, due to the preferential agreement between the Southern Common Market (MERCOSUR) and the Southern African Customs Union ( SACU), signed in 2016, which reduced and exempted export rates on import products.

“This offers us a window of opportunity to penetrate the Brazilian market through these zero percent import duty-free products. Negotiations for this agreement started in 2000,” states Ebrahim.

20 South African companies presented their industrial capabilities at LAAD, which brought together national and international companies focused on defense, security, and technology, equipment, and services.

“I would also urge our companies to interrogate and familiarise themselves with the list of 0% import duty free products as that will orientate them on the viability of their products within the Brazilian market and it would also stand them in best position to draw instant benefits resulting from the SACU/MERCOSUR preferential trade agreement,” argues the representative.

Main exports

With the agreement, Mercosur countries have better access to a consumer market with great potential for growth. The main productive sectors that have benefited from this agreement are chemical, textile, steel, plastic, automotive, electronics and capital goods, as well as agricultural products.

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The future of the partnership

In November, Brazil will host the 11th BRICS Summit, a group that includes China, India, and Russia as well as South Africa. At the meeting, there will be a series of meetings and working groups, where new partnerships are expected to be signed.

Meanwhile, some South African producers have accused Brazil of unfair trade practices by dumping chickens and sugar in the country. These sectors have requested that the South African government apply higher tariffs on Brazilian goods.