**
The aspiration for a robust trade partnership between Canada and South Africa has not yet translated into significant economic initiatives, despite the shared vision articulated by Prime Minister Mark Carney at the recent Davos summit. Both nations, identifying as resource-rich middle powers, are keen to diversify their trading relationships, particularly in light of the unpredictable tariffs imposed by the United States. However, as of now, the potential for collaboration appears largely unfulfilled.
A Natural Partnership
The foundation for a strong alliance between Canada and South Africa seems promising on paper. Each country possesses abundant resources and a desire to expand their international trade networks. South African politicians have embraced Carney’s vision, with many echoing his call for middle powers to unite, notably his statement, “Middle powers must act together, because if we’re not at the table, we’re on the menu.” This sentiment resonates deeply within South Africa, which prides itself on being a ‘moral superpower’ and is in the midst of redefining its foreign policy.
During the previous year, officials from both nations engaged in numerous meetings to align their agendas within various international forums, including the G7 and G20. President Cyril Ramaphosa made a notable visit to Canada for the G7 summit, while Carney travelled to Johannesburg for the G20, fostering a sense of camaraderie between the two governments.
Promises and Progress
In March of last year, Canada unveiled an Africa Strategy aimed at enhancing trade with the continent, and officials spoke optimistically about an “ambitious economic agenda” with South Africa. However, despite an uptick in South Africa’s economic growth and improved trading conditions—such as the resolution of electricity shortages and a strengthening currency—the anticipated trade initiatives have yet to materialise.
Wandile Sihlobo, an agricultural economist on Ramaphosa’s economic advisory council, expressed disappointment in the slow progress, noting that while South Africa views Canada as a vital trading partner, particularly in agriculture, tangible developments have been minimal. “We hope this year Canada can actively engage South Africa and be specific about its interests,” he remarked.
Following a meeting between Carney and Ramaphosa during the G20 summit, Carney announced the initiation of discussions regarding a Foreign Investment Promotion and Protection Agreement (FIPA). Yet, analysts caution that such agreements can take years to negotiate, with South Africa historically favouring a more generalised approach to investor protection.
Limited Initiatives and Missed Opportunities
Further announcements from Carney included a planned trade mission led by South Africa to Canada, which turned out to be limited to a delegation focused on the agricultural machinery sector in Saskatchewan, lacking the broader scope that many experts believe is necessary for effective engagement.
Moreover, the anticipated Cape Town office of FinDev Canada, intended to support developmental finance across Africa, has faced delays, with no confirmed opening date. Critics argue that this focus should encompass a wider range of projects and initiatives throughout the continent, including South Africa as a strategic starting point.
Despite the rhetoric surrounding potential trade growth, actual figures tell a different story. Canadian imports from South Africa have increased over the past two decades, particularly in the mining sector, yet exports have stagnated. In 2024, Canada exported goods worth $583 million to South Africa, a figure that has remained unchanged since 2006, representing a mere 0.1 per cent of Canada’s total global exports.
Challenges and Future Prospects
Trade relations between Canada and South Africa highlight a broader trend of neglect towards the African market, with a Senate committee reporting that trade with Africa constituted less than 1 per cent of Canada’s total merchandise trade in 2024. Carney has frequently asserted his commitment to increasing trade with Africa, but his recent comments suggest a prioritisation of other regions deemed more lucrative.
In discussions with Ramaphosa, Carney highlighted Canada’s strengths in clean energy and emerging technologies. However, the rapid expansion of sectors like solar energy in South Africa has seen dominance from Chinese and European companies, leaving Canada struggling to keep pace.
As both nations strive to diversify their trade relationships, the onus lies on South African firms to better capitalise on opportunities in Canada, a market that shares their commitment to rules-based trade.
Why it Matters
The lack of substantive trade initiatives between Canada and South Africa underscores a critical gap in the potential collaboration between two like-minded nations. As the global economic landscape continues to shift, the opportunity for these middle powers to forge a strategic partnership is ripe. However, it requires decisive action and a commitment to move beyond dialogue to concrete, impactful measures that can elevate their mutual economic interests on the world stage.
