African countries have a lot to gain from a US-China trade war, with opportunities for the continent to step up its services and product export capabilities.
This is according to Francois Fouche, advisor at Trade Research Advisory, a spin-out company of the North-West University, who was addressing dignitaries including ambassadors and trade mission officials at the launch of the 2020 edition of Africa Trade Week in Johannesburg recently.
“South Africa and the SADC region need to export,” Fouche says. “In South Africa alone, while in Q219 there was reasonable quarter on quarter growth, South Africa has not had a very impressive growth run prior to that. We’re a very small and open economy, and we must participate more in the global market.”
Noting that the world’s largest importers and exporters were also the world’s largest economies, he highlighted that international trade strengthened economic growth. Currently, there were massive opportunities for African exporters to go into markets like China and the US, he says.
In order to mine the opportunities, countries had to understand the changing nature of globalisation, he said. “In future, globalisation will be more about what we do than things we make. So, services trade is likely to pick up faster than products trade. Global services trade, at around $5-trillion, is still three times smaller than products trade, which is very mature at around $15,7-trillion.
“The globe is becoming a very small place from a services perspective, with digital technology allowing people in developing countries to render services in the developed world with the benefit of significantly lower costs. This is an opportunity if you are in the services sector, in a low wage country, are highly skilled and globally competitive,” he says.
Fouche cites the ITC survey for the Fifth Global Review of Aid for Trade (2015), which found that the top component of trade costs in which trade support institutions would most value improvements was access to information about export opportunities. “People want intelligence to help grow their exports,” he says.
“Networking and knowledge sharing are crucial for building mutually beneficial trade ties across Africa, and Africa Trade Week is designed to facilitate opportunities to do so,” said Lynn Chamier, event director of Africa Trade Week organisers dmg events. “As the key engagement platform for over 10 000 international industry professionals from 67 countries, Africa Trade Week helps broker deals and boost trade across the continent and overseas.”