From 16 to 20 November, tralac, in collaboration with the National Agricultural Marketing Council (NAMC) held a trade data analysis week in Pretoria, South Africa. The trade data week (these have become known as Geek Weeks among participants) brought together a group of researchers and policy analysts engaged in agricultural trade analysis. The objective was to provide an opportunity for different organisations in South Africa engaged in agricultural trade analysis to work together on a specific project and to share their experience using different methodologies and data sets. An active network of agricultural trade researchers now exists in Southern Africa. 

Organisations participating in this recent exercise included tralac, NAMC and the Western Cape Department of Agriculture. The focus was on South Africa’s agricultural trade relationship with Chile and Argentina. The Argentina analysis is an update of previous work conducted and published by tralac recently.

Initial findings from the Chile analysis reveal that Chile has liberalised its trade extensively over the past 20 years. This was a result of sound macroeconomic management, institutional and structural reforms. GDP per capita has increased significantly and poverty has been reduced by 26% over this period while GDP growth averaged 5.6% per annum, with agriculture only contributing about 4% of GDP. The country has also experienced a net surplus in agro-food trade during this period. The achievements in the agro-sector have been supported by a number of policy initiatives such as, government support to agriculture which amounts to 4% of total farm receipt (PSE) and subsidisation of new plantations (forestry) up to about 75% of cost, among others.

In terms of trade flows we analyse Chile’s agricultural trading relationship between 1997 and 2008 using the World Trade Atlas data. The initial analysis reveals that:

• Chile imported US$ 4.5 billion of agricultural products in 2008 and imports grew at an average growth of 12% over the review period;

• The major suppliers of agricultural imports were Argentina, the EU, the US, Paraguay and Brazil, South Africa was ranked 42 with a market share of a less than 0.1% in 2008;

• Top import products were Bovine meat; Corn (Maize); Wheat and Soybean oilcake in 2008;

• Chile’s agriculture exports were US$10 billion in 2008 having grown by 8% over the review period;

• Top export destinations were the EU, US, Japan and Venezuela. South Africa was ranked 72 most important destination with a share of less than 0.1% in 2008; and

• Main export products were Wine, Grapes, Fish and Apples.

Based on our initial analysis, it is clear that Chile is a direct competitor of South Africa because of the similarity in products traded and also the markets for the products. From an economic point of view, any bilateral agreement will yield very little benefits for South African agriculture and fisheries. However, opportunities still exist where South Africa and Chile can cooperate and have a partnership. Any conceivable partnership will be based on learning from each other and exchange of expertise in related and relevant fields.

Chile has achieved a lot in the last two decades in terms of economic growth and poverty alleviation. The fact that both countries are developing countries with similar experiences from a political economy perspective and both are proponents of the concept of stronger South-South co-operation makes a strong case for a partnership.

For South Africa, lessons can be learnt from Chile on strategies to reduce poverty, boost agricultural development and growth as well as enhancing export competitiveness. For Chile, the well developed and stable economic environment that South Africa offers creates a possible gateway to the rest of Africa. Political rather than economic considerations will weigh more for any partnership that will benefit the South African agricultural sector.