Chapter 3 International Trade in Cultural Goods and Services

Overview

Chapter 3 examines South Africa’s international trade in cultural goods and services, using local and international data sources. The focus is on the US-Mexico-Canada (USMCA) bloc and SADC in comparative perspective, and the impact of the COVID-19 pandemic.

In 2020, South Africa’s cultural goods exports were worth US$316.46 million, and made up 0.37% of the value of all South Africa’s commodity exports. Until 2018, cultural goods exports had been growing strongly, making up 0.47% of South Africa’s total commodity exports (US$448.86 million) in that year. As with GDP growth (Chapter 1) and employment (Chapter 2), the economic slow-down and the impact of COVID-19 have had a negative impact on cultural goods exports. Cultural goods trade contracted more sharply than total commodity trade on both the export and import side for 2018–2020.

Like many small, open economies, South Africa had a cultural goods trade imbalance, with the value of cultural goods imports being more than the value of exports. However, cultural goods imports have been declining recently, and for the first time in 20 years, South Africa had a positive cultural goods trade balance for some quarters in 2020 and 2021. While cultural goods exports initially appeared to recover more quickly after the hard lockdown, they have not yet reached pre-pandemic levels.

Visual Arts and Crafts, Books and Press, and Performance and Celebration are the most significant domains for South Africa’s cultural goods trade. South Africa has a trade surplus in Cultural and Natural Heritage trade, and in Visual Arts and Crafts. The largest cultural trade deficits by domain in both periods were in Performance and Celebration and Books and Press.

In 2019, South Africa had a significant cultural goods trade surplus with USMCA (of US$111.64 million) and with SADC and the rest of Africa (US$62.35 million and US$12.6 million respectively). The USMCA bloc has become an increasingly important destination for South Africa’s cultural goods exports in Visual Arts and Crafts, Cultural and Natural Heritage, and Performance and Celebration domains. Visual Arts and Crafts exports to USMCA actually increased in 2020, as did Books and Press. South Africa’s cultural goods exports to SADC also increased in 2020, during the COVID-19 pandemic. Exports to SADC grew in the Performance and Celebration domain and in Books and Press.

Trade complementarity indices (TCIs) are used to assess the potential for trade expansion between trading partners. South Africa’s Export TCI with the USMCA (47.20%) exceeds that with SADC (35.79%) by nearly 12 percentage points. However, the country’s export TCI with the EU is even greater at 65.07%.

South Africa has a low Import TCI with SADC, which suggests that the region does not produce enough of the range of cultural products that South Africa imports. There is a need to build productive capacity in the CCIs in the SADC region, and to address non-tariff barriers, infrastructure constraints, transport costs, financing and information flows.

Growing digitisation has increased the importance of services trade in the CCIs. CCI services exports grew strongly in several domains, including Audio-visual and related services until 2019.