Finance and Economic Opportunities

In relation to international trade and investment agreements:

[1][a] How many such agreements have the Western Cape Government entered into and [b] what are the details of each agreement;

The international trade agreements, under which the Western Cape Government works to promote trade are listed in the following sub-section. This includes details of any other cooperation agreements or MOUs that the Western Cape Government or its international trade promotion agency have entered into.

1. International Trade Agreements:

1.1 Southern African Customs Union [SACU]

a]    Member states Botswana, Eswatini, Lesotho, Namibia, and South Africa.

b]    Nature: Customs Union. Duty-free movement of goods within SACU, a common external tariff applied on goods entering any of the countries from outside SACU.

c]    Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, plays a role in ensuring that the benefits of this agreement are maximised for economic development. This is done through the facilitation of exports from the Western Cape to SACU member states, and the promotion of integrated regional market access and value chain opportunities to prospective foreign investors. Wesgro does this using:

• International trade missions
• Outward foreign direct investment promotion into the rest of Africa
• Export training and international mentorship
• Business seminars, knowledge sharing and networking
• Use of Decision Support Model [DSM] software to support companies in finding realistic export opportunities
• Inward buying missions and outward selling missions
• Advocacy and specialised advisory services
• Access to strategic networks
• Marketing support for the marketing of value-added goods and services
• International investment promotion aimed at bringing foreign direct investment, not only to the Western Cape but also to the country and the continent.

1.2 Southern African Development Community [SADC]

a]    Member states: Botswana, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Tanzania, Zambia, Zimbabwe [Angola is in process of acceding, DRC and Comoros have not acceded to Protocol on Trade in Goods.]

b]    Nature: Free Trade Agreement for trade in goods. 

c]    Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, plays a role in ensuring that the benefits of this agreement are maximised for economic development. This is done through the facilitation of exports from the Western Cape to SADC member states and the promotion of integrated regional market access and value chain opportunities to prospective investors. Wesgro does this using:

• International trade missions
• Outward foreign direct investment promotion into the rest of Africa
• Export training and international mentorship
• Business seminars, knowledge sharing and networking
• Use of Decision Support Model [DSM] software to support companies in finding realistic export opportunities
• Inward buying missions and outward selling missions
• Advocacy and specialised advisory services
• Access to strategic networks
• Marketing support for the marketing of value-added goods and services
• International investment promotion aimed at bringing foreign direct investment, not only to the Western Cape but also to the country and the continent.

The Western Cape Government’s international export promotion strategy includes a strong focus on boosting trade with the rest of Africa and supporting the development of regional value chains on the continent.

1.3 Southern African Development Community [SADC]: Protocol on Trade in Services [agreement not in force]

a]    Member states: Angola, Botswana, the Democratic Republic of the Congo, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Tanzania, Zambia, Zimbabwe [Excluding Comoros]

b]    Nature: Services trade liberalization. Six services sectors initially [communication, construction, energy, finance, transport, tourism].

c]    Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, will play a role in ensuring that the benefits of this agreement are maximised for economic development once this agreement enters into force.

1.4 SACU – European Free Trade Association [EFTA] Free Trade Agreement:

a]    Member states SACU states, Iceland, Switzerland, Liechtenstein and Norway.

b]    Nature: Free Trade Agreement. Tariff reductions on selected goods, including industrial goods and processed agricultural products [including fish and other marine products]. Bilateral agreements with individual EFTA states govern trade in basic agricultural goods.

c]    Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, plays a role in ensuring that the benefits of this agreement are maximised for economic development. This is done through the facilitation of exports from the Western Cape to EFTA member states, and the promotion of competitive international market access opportunities to prospective foreign investors. Wesgro does this using:

• International trade missions
• Export training and international mentorship
• Business seminars, knowledge sharing and networking
• Use of Decision Support Model [DSM] software to support companies in finding realistic export opportunities
• Inward buying missions and outward selling missions
• Advocacy and specialised advisory services
• Access to strategic networks
• Marketing support for the marketing of value-added goods and services
• International investment promotion aimed at bringing foreign direct investment, not only to the Western Cape but also to the country and the continent.

Europe [incl. the UK] is the Western Cape’s largest export market. The Western Cape’s export promotion strategy includes maintaining and expanding its traditional export market in Europe, while also diversifying to new markets. The SACU - EFTA FTA provides competitive advantages for South African exports in the EFTA countries and as such, Wesgro works to ensure that exporters maximise export opportunities to the EFTA markets under these agreements.

1.5 SADC – European Union [EU] Economic Partnership Agreement [EPA]

a]    Member state: SACU states plus Mozambique, European Union.

b]    Nature: Economic Partnership Agreement. Replaces the trade chapter in the Trade Development and Cooperation Agreement [TDCA]. Reciprocal, asymmetrical trade agreement.

c]    Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, plays a role in ensuring that the benefits of this agreement are maximised for economic development. This is done through the facilitation of exports from the Western Cape to EU member states, and the promotion of competitive international market access opportunities to prospective foreign investors. Wesgro does this using:

• International trade missions
• Export training and international mentorship
• Business seminars, knowledge sharing and networking
• Use of Decision Support Model [DSM] software to support companies in finding realistic export opportunities
• Inward buying missions and outward selling missions
• Advocacy and specialised advisory services
• Access to strategic networks
• Marketing support for the marketing of value-added goods and services
• International investment promotion aimed at bringing foreign direct investment, not only to the Western Cape but also to the country and the continent.

Europe [incl. the UK] is the Western Cape’s largest export market. The Western Cape’s export promotion strategy includes maintaining and expanding its traditional export market in the EU, while also diversifying to new markets. The SADC – EU EPA provides competitive advantages for South African exports in the EU, and as such Wesgro works to ensure that exporters maximise export opportunities to the EU under the EPA.

​​​​​​​1.6 SACU – South Common Market [Mercosur] Preferential Trade Agreement 

a]    Member state: SACU States and Argentina, Brazil, Paraguay, Uruguay.

b]    Nature: Preferential trade agreement. Tariff reductions on selected goods, including approximately 1000 tariff lines on each side. 

c]    Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, plays a role in ensuring that the benefits of this agreement are maximised for economic development. This is done through the facilitation of exports from the Western Cape to Mercosur member states, and the promotion of competitive international market access opportunities to prospective foreign investors. Wesgro does this using:

• International trade missions
• Export training and international mentorship
• Business seminars, knowledge sharing and networking
• Use of Decision Support Model [DSM] software to support companies in finding realistic export opportunities
• Inward buying missions and outward selling missions
• Advocacy and specialised advisory services
• Access to strategic networks
• Marketing support for the marketing of value-added goods and services
• International investment promotion aimed at bringing foreign direct investment, not only to the Western Cape but also to the country and the continent.

The Americas are the Western Cape’s third-largest export market. The Western Cape’s export promotion strategy includes maintaining and expanding its traditional export market in the United States of America, while also diversifying to new markets. The SACU - Mercosur PTA provides competitive advantages for certain South African exports in Mercosur, and as such, Wesgro works to ensure that exporters maximise export opportunities to the Mercosur markets under the PTA, with a particular focus on Brazil.

 1.7 The African Continental Free Trade Area [AfCFTA]

a]    Member states: All the member states of the African Union have signed except Eritrea. As of March 2021, 36 countries have complied with their domestic requirements for ratification. The AfCFTA entered into force on 30 May 2019, however, the schedules to the agreement are still under negotiation.

b]    Nature: Free Trade Agreement. Key objectives of the AfCFTA include creating a single market for goods and services and enhancing economic integration on the African Continent. 

c]    Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, will play a role in ensuring that the benefits of this agreement are maximised for economic development once it is operational. The Western Cape Government’s international export promotion strategy includes a strong focus on boosting trade with the rest of Africa and supporting the development of regional value chains on the Continent.

The rest of Africa is in the Western Cape’s second-largest export market after Europe. The Western Cape’s export promotion strategy includes maintaining and expanding its traditional export market in Africa, while also diversifying to new markets. The AfCFTA provides competitive advantages for South African exports in the AfCFTA countries, especially those that are not members of the SADC, and as such, Wesgro will work to ensure that exporters maximise export opportunities to the AfCFTA markets under this agreement once trading commences.

​​​​​​​1.8 SADC-EAC-COMESA Tripartite FTA [TFTA]

a] Member states: Members of the SADC, East African Community, and the Common Market for Eastern and Southern Africa. The TFTA has not entered into force.

b]    Nature: Free Trade Agreement. Initially trade in goods, with a second phase to cover trade in services and other trade-related areas.

c]   Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, will play a role in ensuring that the benefits of this agreement are maximised for economic development once it is operational. The Western Cape Government’s international export promotion strategy includes a strong focus on boosting trade with the rest of Africa and supporting the development of regional value chains on the Continent.

​​​​​​​1.9 SACUM-UK Economic Partnership Agreement [EPA]:

a]    Member state: SACU states plus Mozambique, UK.

b]    Nature: Economic Partnership Agreement. Reciprocal, asymmetrical trade agreement.

c]    Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, plays a role in ensuring that the benefits of this agreement are maximised for economic development. This is done through the facilitation of exports from the Western Cape to the UK, and the promotion of competitive international market access opportunities to prospective foreign investors. Wesgro does this using:

• International trade missions
• Export training and international mentorship
• Business seminars, knowledge sharing and networking
• Use of Decision Support Model [DSM] software to support companies in finding realistic export opportunities
• Inward buying missions and outward selling missions
• Advocacy and specialised advisory services
• Access to strategic networks
• Marketing support for the marketing of value-added goods and services
• International investment promotion aimed at bringing foreign direct investment, not only to the Western Cape but also to the country and the continent.

Europe [incl. UK] is the Western Cape’s -largest export market. The Western Cape’s export promotion strategy includes maintaining and expanding its traditional export market in the EU, while also diversifying to new markets. The SACUM-UK EPA provides competitive advantages for South African exports in the UK, and as such, Wesgro works to ensure that exporters maximise export opportunities to the UK under the EPA.

MOUs with Strategic Partners

Trade negotiations are a National Government competence. DEDAT and Wesgro provide different levels of support to influence trade negotiations through the DTIC and the numerous export councils. The detail of how Wesgro utilised each trade agreement is described in the previous response to the first question. To actively promote the international trade and investment agreements Wesgro has established different MOUs with strategic partners to maximise the opportunities of the trade agreements in markets for Western Cape exporters. These are listed as follows:

  a]    WCPG and U.S. Consulate General in Cape Town Investment Promotion Partnership: A partnership agreement was signed in 2021 and the objective of this investment promotion partnership will be to deepen cooperation and coordination, and to promote and increase bilateral trade and investment through various engagements, events, and high-level interactions. This will be through Wesgro, and the services, resources, and expertise of 17 U.S. government agencies to support U.S. and African businesses, and the African Growth and Opportunity Act [AGOA], which allows duty-free exports of more than 6,500 goods from Africa to the United States.

b]    Wesgro and UK DIT: The objective of this Memorandum of Understanding [this Memorandum], is to establish a strategic partnership between the participants to enhance the trade and investment relationship between the United Kingdom and the Western Cape to secure positive commercial outcomes. The partnership will ensure ongoing collaboration to maintain existing investments and facilitate the development of new trade and investment opportunities. The partnership will see both participants work to develop support services for the UK and South African companies and promote business environment improvements. The participants will work together, and alongside other relevant departments and agencies, on a national and local level, to meet this objective and wider aims. In short: It's an MoU to promote collaboration between Wesgro and UK DIT to enhance trade and investment.

d]    Swiss Import Promotion Programme [SIPPO]: The objective of cooperation between SIPPO and Wesgro is [a] to advance the export promotion services of Wesgro to export-ready companies, and [b] to equip these companies with improved access to European and other important target markets. To this end, SIPPO and Wesgro will provide a range of services to export-ready companies within the areas of capacity building, networking, matchmaking and market intelligence.

d]    Angola chamber of commerce CACIAAS - 2019: The purpose of this agreement is to establish the scope of cooperation and framework conditions under which Wesgro and CACIAAS will work within their mandates under the prevailing laws and regulations of their respective countries. The objective of the cooperation between CACIAAS and Wesgro is a] to advance the export promotion services of Wesgro towards export-ready companies, and b] to equip these companies with improved access to Angola. To this end, CACIAAS and Wesgro will provide a range of services to export-ready companies within the areas of capacity building, networking, matchmaking and market intelligence.

2]    Botswana Investment and Trade Centre [BITC] – 2016: Desiring to strengthen and assist cooperation aimed at enhancement of investment activities between parties, desiring to design favourable conditions for sustainable growth of economic cooperation, intending to develop direct contacts between business circles in the Republic of Botswana and the Western Cape Province in RSA.

[2]        What is the Department of Economic Development and Tourism doing to promote actively international trade and investment agreements?

To actively promote the current international trade agreements, it is necessary to continuously drive an awareness process, education on the details, implications and opportunities for exporters as well as a monitoring approach to determine a take-up rate.

The export unit within Wesgro undertakes the following:

• Study Tours – provide local context to exporters of markets with preferential trade agreements for their commodity
• Virtual and Hybrid Export Missions – Educating exporters in market opportunities through trade platforms, especially in preferential markets
• Advocacy and specialised advisory services – Technical resources to exporters
• Global market positioning – Marketing work to position the Western Cae export commodities in key source markets prioritised concerning trade opportunities which include preferential trade conditions.
• Access to strategic markets and networks

The Unit’s export development services facilitated through the Export Advancement Programme are used not only for awareness, but to capacitate the exporter on market requirements, conditions & trade policy, including:

• Technical export development training including orientation to export, export marketing plan, financial risk management, export costings and logistics and Incoterms.
• Export, market and sector awareness seminars.
• Business one-on-one mentoring services from international and local experts.

All these services are used to assist and develop the exporter and promote trade opportunities using the existing trade agreement advantages, which Western Cape exporters can access.