Final month, China’s Basic Administration of Customs launched its customs information for 2023. The info confirmed that China’s total trade with Africa grew a modest 1.5 percent in 2023, reaching $282.1 billion, however Africa’s commerce deficit with China widened. Whereas Chinese language exports to Africa reached $173 billion, a rise of seven.5 % over 2022, Africa’s exports to China dropped by 6.7 percent to $109 billion.
Given these figures, it got here as welcome information that final month China lowered import tariffs for South African Rooibos tea from between 15 percent to 30 percent down to 6 percent. Regardless of being South Africa’s largest commerce associate and one of many world’s largest tea customers, China’s excessive tariff charges for South African Rooibos tea have meant that China was simply South Africa’s seventh-highest export vacation spot in 2023, and previous to this, didn’t even make it to the highest 10 for its famously wholesome caffeine-free tea.
Compared, China’s neighbor, Japan, regardless of making use of a 17 % tariff price for Rooibos tea, has been South Africa’s high export vacation spot for its Rooibos tea since 2020, as a result of Japan has a big marketplace for wholesome tea. Japan is adopted by European nations, akin to France, Germany, and the Netherlands that supply zero tariffs for South African Rooibos teas as a part of their Generalized Scheme of Preferences for creating nations.
Given the dimensions of China’s shopper market, China’s choice to scale back tariffs for South African Rooibos tea by nearly 80 % may make China a precedence export market in future. This might not solely assist scale back the commerce deficit between South Africa and China, but additionally, if branded Rooibos merchandise come into China, it may present South Africa the chance to spice up job creation and its value-added exports to China. South Africa’s Rooibos trade produces roughly 20,000 tons annually and employs 5,000 people.
That stated, there may be one main problem to this aspiration: Recognition of South Africa’s Geographical Indications (GIs), together with the GI for Rooibos tea.
GIs grant distinct rights to “the qualities, traits or popularity of the product primarily as a result of fatherland,” in response to the World Mental Property Group. In different phrases, GI safety permits producers to lift retail costs. Nicely-known examples embrace French champagne and brie, English cheddar, and Italian prosciutto di parma ham, that are acknowledged in lots of nations and areas, together with China.
Rooibos and different African merchandise akin to South African wine and Benin’s “sugarloaf” pineapples fall below the class of eligible Geographical Indications. On grocery store cabinets, GI recognitions means these merchandise should be authentic – others can’t manufacture variations of them, and the companies that promote these merchandise can finally get larger costs, that means larger incomes in African nations.
China turned Africa’s first associate to decide to creating a course of to acknowledge Africa’s GIs on the eighth Discussion board on China-Africa Cooperation (FOCAC) in 2021, however no clear course of has been revealed to this point. With the ninth FOCAC attributable to happen in late 2024, and with the welcome push towards opening up China’s market to African merchandise in recent times, African leaders want to make sure that a transparent technique to implement a course of to acknowledge Africa’s GIs makes it to the FOCAC 9 agenda.
There are already a number of Chinese language corporations importing unprocessed Rooibos tea leaves into China and packaging them below their very own manufacturers. Pushing for the popularity of African GIs and exporting GI merchandise, akin to Rooibos tea, may also help African nations to compete with different areas within the Chinese language market and create house for distinct, higher-value African merchandise to enter the Chinese language market.
Fortuitously, and with the current tariff reduce as a sign of goodwill and curiosity from China, South Africa is effectively positioned to cleared the path in pushing for China to acknowledge African GIs. The South African Customs Union (SACU) has already secured the popularity of Rooibos tea’s GI standing within the European Union in 2014 and the United Kingdom has also continued to recognize its GI post-Brexit. SACU can apply classes realized from its negotiations with the EU and work with different African regional our bodies, together with the African Continental Free Commerce Space Secretariat, to barter GI offers with China.
Certainly, a shared African technique to see the FOCAC 8 pledge delivered, maybe utilizing Rooibos as a place to begin, may make some distinction to closing that commerce deficit in 2024, in order that each the quantity and worth of African exports to China persistently will increase going forwards.