The document discusses trade between South Africa and Europe. It notes that South Africa has engaged in foreign trade since the 1600s, originally exporting agricultural goods and importing manufactured items. It is now Europe's largest trading partner in Africa. South Africa's primary exports to Europe are fuels, mining products, machinery, agricultural goods, and intermediate goods. Its primary imports from Europe are machinery, chemicals, and vehicles. Trade between the two regions has increased over 120% since they established a trade agreement in 1999.

1. TRADE BETWEEN SOUTH AFRICA
AND EUROPE

2.  South Africa has been engaged in foreign trade
since the mid-1600s.
 For the 1st few centuries thereafter, South
Africa exported agricultural products and
imported virtually everything that could not be
made from local resources.
 The trade relations between South Africa and
the European Union are regulated by the
Trade, Development and Cooperation
agreement concluded with European Union in
1999

3.  According to the European Commission, South
Africa is the European Union’s largest partner
in Africa
 In the text below, we will be explaining this
trade in terms of types of goods and services
South Africa exports and imports from Europe.

4.  According to European Commission Union
(2005- 2016) the primary products that South
Africa exports to Europe are as follows: Fuels
and mining products, machinery and transport
equipment, agro-processing products and other
intermediate goods.

5.  The primary products that South Africa
imports from Europe are as follows:
machineries, chemicals and vehicles.
 HOW IMPORTANT ARE CHEMICALS
 Chemicals are very important as they ensure that we
have healed and powers and that we access to
telecommunication, music and media everywhere.
 Vehicle working to deliver goods and lowering
delivery costs.
 Machineries used at mining construction and road
construction .

6.  Since the agreement between South Africa and
Europe has been established, trade between
these two countries has improved
substantially.
 South Africa bilateral economic relations also
raised exports in goods and services, from 106
billion in 1994 to R892 billion in nominal terms
in 2012.
 Trade in goods between the two partners has
increased by more than 120%

7.  When the storm hit, South Africa had been sitting on relatively strong fundamentals and
emerging from a protracted period of economic expansion. The meltdown allowed “not-
so-well-hidden” vulnerabilities to surface. Unemployment, inequality, poverty, crime,
and HIV/AIDS still continue to plague the country. Agriculture, mining and
manufacturing declined while the trade and current account deficit (CAD) widened.
Household indebtedness reached worrying levels in a low-interest rate environment and
inflationary pressures mounted. Moreover, severe energy shortages erupted (inducing
blackouts) and a tense political climate resulted in President Mbeki’s resignation.
 In months ahead, the sustainability of the CAD and the impact of the crisis on the real
economy will remain the key issues. The financial account has so far been sufficient to
finance the CAD, but sudden stops of capital inflows are not unheard of in developing
countries during hard times. While the free-floating exchange rate rules out insolvency
issues, financing the CAD will be much more difficult and costly; on the other hand,
lower global demand will hurt South Africa’s export-sector and the falling rand is not
expected to significantly counter the decline.
 The crisis has also impacted the real economy. House prices have been declining, along
with vehicle sales. Manufacturing production has slowed, the mining sector is shrinking
further, and retrenchments are on the increase. Growth is expected to slow-down which
is a risky proposition for South Africa and for Africa as a whole. Luckily, the sound fiscal
position will somewhat cushion the economic slowdown.

9.  The exchange rate has an effect on the trade
surplus or deficit.
 A weaker domestic currency stimulates exports
and makes imports more expensive.
 Over the last ten years the SA rand has both
depreciated and appreciated, thus making the
value of vehicles and machinery imports to
fluctuate during these period.

10. 8.9071
10.5038
11.2597
14.4393
13.9739
16.9558
0
2
4
6
8
10
12
14
16
18
2011 2012 2013 2014 2015 2016
Exchange rate : Euro vs ZAR
Exchange rate : Euro vs ZAR

11. TOT’’
TOT’’’
TOT’
OC. EU
OC. SA
Imports:Machinery
Exports: Mining products
5M
4M

12.  DEMOCRAPHIC CHANGE
 BARRIERS TO ENTRY
 NON BARRIERS TO ENTRY
 TECHNOLOGY
 ENERGY AND OTHER NATURAL
RESOURCES
 TRANSPORTATION COSTS

13.  South Africa is an open economy driven by
extensive trade routes that developed between
cities and kingdoms, some trade routes were
overland.
 Trade has driven much of growth in Africa’s
economy in the early twenty first century.
Europe is an increasily important trading
partner exporting greater goods from South
Africa.