What is the story about?
What's Happening?
Research conducted by Stellenbosch University and Mendel University in the Czech Republic suggests that South Africa must rethink its export strategy to the European Union (EU) due to declining agri-food trade. Despite strong trade agreements, South Africa's agri-food exports to the EU are facing challenges from non-tariff barriers and related disputes. The study analyzed 20 years of trade data, revealing that while exports increased between 1999 and 2019, growth slowed significantly after the global financial crisis. The research highlights the need for infrastructure investment and market diversification to enhance competitiveness.
Why It's Important?
The decline in agri-food exports to the EU poses a threat to South Africa's agricultural sector, which relies heavily on these markets. The study's findings suggest that existing trade agreements may no longer be sufficient to support the sector's development or long-term competitiveness. South Africa may need to prioritize products with growing demand and target emerging markets within the EU. Additionally, investment in infrastructure and policy interventions could help reduce transaction costs and improve market access, ensuring the sector's sustainability and growth.
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