South-South ties hold key amid tariffs

South-South trade cooperation could offer relief to many countries grappling with the United States-imposed tariffs, said South African officials and business leaders.

Xolelwa Mlumbi-Peter, South Africa's ambassador to the World Trade Organization, said some countries are struggling to accept the shift from a unipolar to multipolar world, noting that some countries in the Global North are disregarding the very trade rules they once crafted and championed.

"I can say without doubt that South-South cooperation can succeed depending on how we structure the relations for mutual benefit," Mlumbi-Peter said.

"It is important to enhance relations because what we see with tariffs, offers opportunities to strengthen relations between countries of the South. We should change the structure of the relations to promote investment that strengthens our capacity to create jobs and grow the economy."

She said the cooperation among the Global South countries should be complementary, boost production, and promote technology transfer.

Mlumbi-Peter noted that China has introduced a zero-tariff policy, granting duty-free access to 53 African countries with which it has diplomatic relations.

She said South Africa is in talks with China to take advantage of the zero tariffs and also expand the sale of local products to the Chinese market.

South Africa plans to offer incentives to Chinese companies participating in the beneficiation of critical minerals within a special economic zone to boost the development of the electric vehicle industry in South Africa, Mlumbi-Peter said.

Beneficiation is the process of treating ore or similar material from the earth to improve it.

She said that on Friday, South African government officials will meet Chery, a Chinese car manufacturer, to negotiate potential investment deals in the country.

She said that for South-South cooperation to succeed, countries should come up with alternative development models such as BRICS, whose members are currently drafting their 2030 economic strategy.

Wamkele Mene, secretary-general of the African Continental Free Trade Area Secretariat, said 49 out of Africa's 55 countries have signed onto the agreement, committing to eliminate trade barriers, while 24 have already gazetted it.

He noted that Africa along with Global South regions such as Latin America and the Gulf, presents vast trade opportunities.

For Africa's domestic market, Mene stressed the need to tackle market fragmentation, harmonize rules, address infrastructure gaps, and strengthen production capacity.

"International investment by China in Africa has been transformative, we need an intensive infrastructure that supports trade," he said.

Mene said that African countries should adopt the Pan-African Payment and Settlement System to enable trade in local currencies.

He said South-South cooperation could help counter what he described as the "onslaught on the predictability of the economy "caused by tariffs.

Wolfe Braude, manager at Agricultural Business Chamber, said the tariffs have hit the agricultural sector in South Africa hard.

He said some stakeholders believe it may not be sustainable in the long term to rely on the US market, adding the sector is increasingly looking to expand trade with countries in the Global South.

"We have to diversify, we have to find additional markets. We are expecting some deals to be signed to export to the Middle East and Asia. China has an enormous potential for our products," Braude said.

Commercial benefits

He said the South African agricultural sector welcomed the consensus reached at the recent BRICS summit in Brazil to deepen the intra-BRICS cooperation, noting the sector anticipates significant commercial benefits from the grouping.

Braude said that while there is strong potential in traditional markets such as Africa, the United Kingdom, the European Union, BRICS members, and the wider Global South, trade agreements must be mutually beneficial.

He also acknowledged government efforts to secure new trade deals on behalf of the sector.

Elizabeth Sidiropoulos, CEO of the South African Institute of International Affairs, said the tariffs also present opportunities for countries to strengthen trade among themselves.

She noted that economies in Asia, ASEAN, and Latin America are among the world's fastest-growing, offering significant potential.

Sidiropoulos added that Africa, the European Union, Gulf countries, Southeast Asia, and BRICS partners also provide promising avenues for expanded trade.

She said the tariffs have compelled countries to accelerate strategies to diversify their markets, creating an opportunity to deepen South-South cooperation in a way that also supports development.

"We must work together across the developing world to build stronger industrial capacity, particularly in Africa. Asia is a growing economic hub, and that is where opportunities lie," Sidiropoulos said.

She agreed with Mene that boosting intra-African trade will require tackling market fragmentation, increasing intra-African investment, and building stronger regional value chains.