Trade, Industry and Competition Minister Parks Tau has reaffirmed South Africa’s ‘Butterfly Strategy’ for trade and exports, amid ongoing uncertainty over the future of trade relations with the US and concerns about the potential impact of the EU’s carbon border adjustment mechanism (CBAM) on exports to the bloc.

In his Budget Vote address, Tau said the butterfly strategy had its trade and export body rooted in Africa, with the “game changing” African Continental Free Trade Area (AfCFTA) Agreement as its central component.

“From this centre, two wings unfurl — one reaching westward across the Atlantic, the other eastward across the Indian and Pacific oceans — carrying with them the ambition of South African enterprise,” he ruminated.

The vision, Tau added, was for Africa to move from the periphery of global trade and for South Africa to transition from being primarily an exporter of goods to “a creator of value” and a connector of regions.

“We celebrate the rise of South African value-added exports under the AfCFTA to R820-million, but this is just the beginning.”

An automotive pact was also being finalised to integrate South Africa’s manufacturers into regional supply chains, while a Protocol on Digital Trade was also being progressed to position Africa as “our bedrock, resilient market”.

In addition, Tau announced that an Export-Import Bank of South Africa would be fully operational by 2028, as part of efforts to strengthen the country’s trade finance architecture.

In response to questions posed during the Budget Vote debate regarding fraught relations with the US, which could impose 31% tariffs on South African exports should the reciprocal-tariff pause be lifted on July 9, Tau again noted that a comprehensive offer had been made to “normalise” relations.

The offer, he said, carried “reciprocal benefits”, such as buying gas form the US to address the country’s so-called gas supply cliff in return for concessions for South African steel and automotive exports, as well as an intensification of counter-seasonal agricultural trade.

South Africa was also pursuing a Clean Trade and Investment Partnership (CTIP) with the EU to mitigate the potential impact of CBAM, which South Africa would continue to oppose in parallel, potentially at the World Trade Organisation.

Instead of “wallowing in self-pity” over CBAM, South Africa would seek to use the CTIP to mitigate its impact, with Tau highlighting an initial R90-billion commitment, which he said opened duty-free access for exports in key sectors, such as “dairy for the local production of Amarula, sustainable aviation fuel, new energy vehicles, green hydrogen, and battery components”.

Tau added that efforts were also under way to implement the country’s framework agreement with China, with a particular focus on diversifying exports to the giant Asian economy, while seeking to unlock trade and investment relations with countries in the Middle East as well as members of the BRICS Plus bloc.

“Through targeted trade missions, specialised exhibitions, and capacity building for exporters, we aim to propel our export value to R3-trillion by 2029/30, a cornerstone of our sustained 3% GDP growth target,” Tau said.