EXPORT WEEK 2015 TRADE STATISTICS

An overview of international trade statistics: local, regional and international Trading with KZN

What’s international trade International trade means that you can wear Italian shoes and American jeans while eating Chinese food, watching a British documentary, with a French desert chilling in the fridge If you walk into a supermarket and are able to buy South American bananas, Brazilian coffee and a bottle of South African wine, you are experiencing the effects of international trade UCT GetSmarter Investopedia Tropical Heat No need to hop on a boat to bring home some island style – tropical prints are everywhere this season FairLady Oct 2015

Why trade? More balanced production [or provision] of seasonal goods [and services] Cost reduction (lower unit costs due to scale economies) Extended product lifecycle (for different markets with different levels of development and discernment) Improved product quality & creativity (to conform with foreign conditions) Hedging of risk (directing supply to fast-growth markets)

As a small open economy, South Africa participates quite meaningfully in international trading platforms Inventions and innovations in information and communications technologies (ICT) have made it possible for countries such as South Africa to keep transparent records of their international trade activities Trade stats: Global trade (X) Africa (total & share of global) SA (total and % of global) Most traded commodities: (Global, Africa & South Africa) Largest trade markets: (global, SA’s [X & M], KZN’s [X & M]) SA and KZN’s trade balance (or net exports) Lessons

$18, 682,444,395,000 Europe the largest contributor to world trade at US$6.4tr Asia second at US$5.6tr North America follows at US$2.8tr Africa’s share the smallest at US$630bn Europe and Americas net importers (their shares as destinations larger than their shares as origins, Europe 36.6% vs 35.6%, Americas 16.9% vs 13.2%.) All other regions were net exporters, an indication of their trade dependence with the Americas and Europe This explains why the world economy slows down when these economies experienced financial and fiscal challenges Africa’s contributed 3.50c to every dollar traded in the world

World exports since 2001 (US$ tr) Europe the largest contributor to world trade at US$6.4tr Asia second at US$5.6tr North America follows at US$2.8tr Africa’s share the smallest at US$630bn Europe and Americas net importers (their shares as destinations larger than their shares as origins, Europe 36.6% vs 35.6%, Americas 16.9% vs 13.2%.) All other regions were net exporters, an indication of their trade dependence with the Americas and Europe This explains why the world economy slows down when these economies experienced financial and fiscal challenges Africa’s contributed 3.50c to every dollar traded in the world Source: WTO/UNCTAD (2015), TradeMap

Europe and Asia backbone of world trade Imports Europe the largest contributor to world trade at US$6.4tr Asia second at US$5.6tr North America follows at US$2.8tr Africa’s share the smallest at US$630bn Europe and Americas net importers (their shares as destinations larger than their shares as origins, Europe 36.6% vs 35.6%, Americas 16.9% vs 13.2%.) All other regions were net exporters, an indication of their trade dependence with the Americas and Europe This explains why the world economy slows down when these economies experienced financial and fiscal challenges Africa’s contributed 3.50c to every dollar traded in the world Source: WTO (2014), WTS Report

South & Central America Europe, Asia and North America still the backbone of world trade Destination North America South & Central America Europe CIS Africa Middle East Asia World Origin 16.8 4.3 36.4 3.1 3.4 4.2 29.6 100.0 6.5 1.2 2.0 0.1 0.2 0.4 2.7 13.2 South & Central America 1.0 1.1 0.7 0.0 4.0 2.8 24.9 1.4 3.6 36.3 Commonwealth of Independent States (CIS) 2.2 0.8 0.3 0.5 0.9 3.3 0.6 3.8 7.4 5.5 4.7 1.5 31.5 Europe the largest contributor to world trade at 36.3% (exports) and 36.4% (imports) Asia second at US$5.6tr North America follows at US$2.8tr Africa’s share the smallest at US$630bn Europe and Americas net importers (their shares as destinations larger than their shares as origins, Europe 36.6% vs 35.6%, Americas 16.9% vs 13.2%.) All other regions were net exporters, an indication of their trade dependence with the Americas and Europe This explains why the world economy slows down when these economies experienced financial and fiscal challenges Africa’s contributed 3.50c to every dollar traded in the world Source: WTO (2014), World Trade Statistics Report

World’s leading export markets, 2014 (US$ bn) Source: WTO/UNCTAD - TradeMap (2015)

World, Africa & SA top 10 export products $18, 682,444,395,000 Africa $542,995,368,000 (3%) South Africa $90,612,104,000 (0.5%) 2014 Mineral fuels, oils, distillation products (Saudi Arabia, Russian Fed, USA) Mineral fuels, oils, distillation products (#6) (Nigeria, Angola, Algeria) Pearls, precious stones, metals, coins Electrical, electronic equipment (China, Hong Kong, USA) (South Africa, Botswana, Ghana) Ores, slag and ash Machinery, nuclear reactors, boilers (China, Germany, USA) (South Africa, DRC, Sierra Leone) Mineral fuels, oils, distillation products Vehicles other than railway, tramway (Germany, Japan, USA) Electrical, electronic equipment (#3) (Tunisia, Morocco, South Africa) Pearls, precious stones, metals, coins (#12) (Switzerland, Hong Kong, USA) (South Africa, Morocco, Tunisia) Iron and steel Plastics and articles thereof (China, USA, Germany) Copper and articles thereof (#3) (Zambia, DRC, South Africa) Optical, photo, technical, medical, etc apparatus (USA, China, Germany) Cocoa and cocoa preparations (#7) (Cote d’Ivoire, Ghana, Nigeria) Edible fruit, nuts, peel of citrus fruit, melons Pharmaceutical products (Germany, Switzerland, Belgium) (South Africa, Tunisia, Morocco) Organic chemicals (China, USA, Belgium) (South Africa, Egypt, Zimbabwe) Aluminium and articles thereof (91.3%) Iron and steel (#20) (China, Japan, Germany) Edible fruit, nuts, peel of citrus fruit, melons (South Africa, Egypt, Cote d’Ivoire) Plastics & articles thereof The world trades mainly in (i) fuels and (ii) manufactures, of which electrical and electronic equipment, machinery and vehicles contributed the largest portion Iron and steel (SA #21) Pearls (SA #12) Africa exports: minerals (Nigeria, Angola, Algeria, Libya, Equatorial Guinea, SA #6) Copper: Zambia, DRC, SA Electronics: Tunisia, Morocco, SA Fruit: Ghana, SA Source: WTO/UNCTAD - TradeMap (2015)

For every $100 traded in the world, 50c came from SA South Africa’s share of world exports (%), 2005—2014 For every $100 traded in the world, 50c came from SA Source: WTO/UNCTAD - TradeMap (2015)

South Africa’s top destination and source markets, 2014 Source: Quantec (2015)

South Africa’s top export & import products, 2014 Source: Quantec (2015)

RSA trade by province (X & M) (%), avg 2010—2014

KZN export & import markets, 2014 Source: Quantec (2015)

KZN export & import products, 2014 Source: Quantec (2015)

KZN’s M has consistently > X RSA & KZN export & import values, 2005—2014 KZN’s M has consistently > X Source: Quantec (2015)

RSA & KZN trade balance, 2005—2014 Source: Quantec (2015)

Lessons World trade [exports] have grown tremendously in the past decade Africa’s and South Africa’s contribution to world exports have been quite rigid (3.5% and 5% respectively) KZN’s share of SA’s exports around 10% (i.e 5c of the 50c that SA contributes to world exports South Africa has recorded a trade deficit 80% of the time between 2005 and 2014 KZN’s deficit (M larger than X) has been chronic While there is no tested link between trade balance and unemployment rates in the country, there is a wide belief that excessive imports have eroded domestic jobs Jobs lost, particularly in manufacturing due to large imports of finished goods, have not been sufficiently replaced by growth in other sectors

Lessons There is strong drive towards industrialisation and value addition to the country’s exports of natural resources Industrial Policy Action Plan – IPAP KZN Industrial Economic Hubs – IEHs KZN Industrial Development Strategy – IDS Special Economic Zones and Industrial Development Zones (SEZs & IDZs) South Africa is open to trade, but there is a need to address deficiencies such as the unemployment rate – widely believed to be structural in nature Growth in trade should show meaningful impact on job creation Export development high on the agenda, to support export promotion & job creation DTI & TIKZN services available to assist accelerated export growth