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In this article we take a look at South Africa's trade balance (the difference between imports and exports) with countries from North American Free Trade Agreement (NAFTA). NAFTA countries are the United States of America, Mexico and Canada.
And while SA has benefited greatly from some in NAFTA, it has been on the losing end against others in NAFTA. We take a look below, |
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So who exactly does SA have favourable and unfavourable trade balances with?
The line chart below shows the annual trade balance South Africa has with the United States, Canada and Mexico from 2010 up to 2018. 2018 values are estimated based on available information for 2018.
It is clear from the graphic above that trade is very favourable for South Africa with the United States. It is relatively even with Canada over time, while South Africa's trade balance with Mexico is very negative. What this means is that South Africa imports a lot more for goods from Mexico, compared to what it is exporting to Mexico. So when it comes to trade with Mexico, South Africa pays more to Mexico than what it receives from Mexico. Thus we are in a deficit when it comes to trade with Mexico.
While trade with the USA places us in a strong surplus (we export a lot more to the USA than what we are importing from them, so more money is coming into SA from the USA than leaving it in terms of money paid for goods imported from the USA). This gives us a trade surplus with the USA. But the USA's contribution to trade between South Africa and NAFTA countries is so big that it puts South Africa in a surplus when looking at trade between South Africa and all NAFTA countries.
A summary below shows the cumulative trade balance for each of these countries from the start of 2010 up to estimated end of 2018.
But even with the negative trade balance with Mexico from 2010 up to estimated end of 2018, South Africa has a positive trade balance with NAFTA of R 13 728 681 162 over the course of this time period. Largely driven by very favorable terms of trade with the USA.
So readers might be wondering what exactly is it that we are importing from Mexico that is leading to this massive trade deficit? Based on the data received from South Africa's customs office, the summary below shows the type of goods being traded and the trade balance between the two countries:
So machinery and related goods makes up the majority of South Africa's trade deficit with Mexico. Largely machinery from US companies that are manufactured in Mexico and sent directly to South Africa.
While trade with the USA places us in a strong surplus (we export a lot more to the USA than what we are importing from them, so more money is coming into SA from the USA than leaving it in terms of money paid for goods imported from the USA). This gives us a trade surplus with the USA. But the USA's contribution to trade between South Africa and NAFTA countries is so big that it puts South Africa in a surplus when looking at trade between South Africa and all NAFTA countries.
A summary below shows the cumulative trade balance for each of these countries from the start of 2010 up to estimated end of 2018.
- United States: R 52 215 732 604
- Canada: -R 5 514 726 439
- Mexico: -R 32 972 325 003
But even with the negative trade balance with Mexico from 2010 up to estimated end of 2018, South Africa has a positive trade balance with NAFTA of R 13 728 681 162 over the course of this time period. Largely driven by very favorable terms of trade with the USA.
So readers might be wondering what exactly is it that we are importing from Mexico that is leading to this massive trade deficit? Based on the data received from South Africa's customs office, the summary below shows the type of goods being traded and the trade balance between the two countries:
- Live animals: R -2 002 097
- Vegetables: R 3 442 180 470
- Animal or vegetable fats: R -3 307 849
- Prepared foodstuffs: R -1 912 814 343
- Mineral Products: R 4 848 062 190
- Chemicals: R -1 644 358 464
- Plastics & Rubber: R -691 726 575
- Raw hides & leather: R 1 196 205 350
- Wood Products: R 2 107 521
- Wood pulp & paper: R 63 503 456
- Textiles: R -172 914 416
- Footwear: R -22 761 295
- Stone & Glass: R -147 460 485
- Precious Metal: R -2 643 090
- Products Iron & Steel: R 2 526 583 374
- Machinery: R -25 327 653 730
- Vehicles aircraft & vessels: R -8 164 704 703
- Photographic & medical equipment: R -4 972 697 727
- Toys & Sport apparel: R -745 734 591
- Works of art: R -57 909 460
- Other unclassified goods: R 14 806 286
- Equipment Components: R -1 197 084 826
So machinery and related goods makes up the majority of South Africa's trade deficit with Mexico. Largely machinery from US companies that are manufactured in Mexico and sent directly to South Africa.