Abstract:
It is widely accepted that a country's foreign trade sector has a fundamental
role to play in creating economic growth and development. It is therefore
argued that one of the key objectives of any country's macro economic policy
should be to create and maintain an internationally competitive
manufacturing sector.
From a macroeconomic perspective it is of fundamental importance to South
Africa to keep improving its export position if the country wants to achieve an
economic growth rate of six percent per annum as set out in the GEAR
strategy. South Africa's competitiveness and share in world trade can only
increase if there is an increase in the levels op exports.
In order to achieve an increase in exports, the country had to travel a path of
trade liberalisation. Due to different applicable tariffs and different reforms
according to the GATT, it is difficult to examine the impact of trade
liberalisation on all sectors of the economy. The aim of this study is to
evaluate the impact that trade liberalisation in South Africa had on the South
African automotive and textile industries. These two sectors were chosen
due to the fact that they were formerly the most protected sectors and the
assumption was made that the impact of liberalisation would be more evident
in these two sectors than in those that were not so much protected.
The automotive industry has in recent years of trade liberalization
experienced an increase in production and exports, but there was a reduction
in employment levels. However, this can be ascribed to more effective
production methods. Although the automotive indusby experienced a rough
and sometimes difficult time to adapt to the liberalization process, it has
completed the process of adaptation and is focused on being an international
role player. On the other hand, the textile industry is experiencing difficulties
in adapting to the process of liberalization and a more open economy. This
is evident from the fact that the sector experienced a decline in production
and employment levels.
The conclusion can be made that trade liberalization had some success in
the automotive industry, but that the textile industry is struggling without
protection. However, there is still a long road to travel before a definite
conclusion can be drawn on the effect that trade liberalization had on the
South African economy, especially with regards to exports as a means to
boosting growth.
