Identifying export opportunities for South Africa in South America with special reference to measuring trade barriers
South African exports to South America have not increased in recent years, despite the high growth in import demand in South America. Reasons for the latter may include the high barriers to trade between South Africa and the different South American countries. The main objectives of this study are firstly, to determine and measure the barriers to trade for South Africa in the different South American countries; secondly, to identify realistic export opportunities for South Africa in the South American countries and finally, to assist the various export promotion organisations, export councils and industry associations to focus their export promotion activities on the product–country combinations with a realistic potential for export success. The literature study focused on defining and identifying the different barriers to trade and their influence on trade. Trade barriers are any parts of the trading process that increase trade costs. The trade barriers focused on in this study are tariffs, non–tariff barriers (NTBs), transport cost, time to import, infrastructure, logistics, distance, cultural distance and exchange rate. The effect of these costs on prices and the result on the price competitiveness of export prices are discussed. The four largest trade barriers that South Africa faces when exporting to South American countries are tariffs, cost, time and language. Compared to the world, South America applies relatively high tariffs for goods imported from South Africa. The total transport cost and time are higher than the world averages. The language gap is also large, because Spanish is South America’s overall most spoken language. The Decision Support Model (DSM), developed by Cuyvers et al. (1995) and Cuyvers (1997), was chosen as the methodology to identify the most recent realistic export opportunities for South Africa in the South American countries (as described in the methodology). Filter 3.2 of the DSM was reconstructed and the data was updated. The DSM results are presented according to product–country combinations. The South American countries in the top 50 product–country combinations, ranked according to each country’s number of export opportunities, are Brazil (25), Peru (7), Argentina (5), Colombia (4), and Chile (4). These five countries are also the countries with the lowest trade barriers for South Africa in South America. The products with the highest potential export values within the top 50 product–country combinations are: transportation products (e.g. 1500 cc–3000 cc automobiles and diesel trucks), mineral products (e.g. different variations of coal, anthracite and sulphurs), vegetable products (e.g. maize (except seed corn) and fresh pears and quinces), chemicals (e.g. polypropylene, ammonium, monoammonium, nitrogen–phosphorus–potassium), machinery (e.g. generators, engines, furnaces, boring machines etc.) and foodstuffs (wine, sugar and tobacco). It is recommended that the South African trade promotion organisations, namely the Department of Trade and Industry (DTI), the provincial trade promotion organisations, the various export councils and industry organisation use the results of this study to focus their investments in the production and export promotion strategies on the identified product–country combinations.