Perspectives on Trade, Investment and Competition Policy in South Africa

This research paper by Trudi Hartzenberg for the South African Institute of International Affairs (SAIIA) examines the intersection of trade, investment, and competition policy in South Africa. It analyzes how South Africa balances the need for foreign direct investment (FDI) and global trade integration with domestic development goals, particularly employment creation. The paper details the evolution of South Africa's competition regime, the role of the Competition Act of 1998, and the complexities of managing cross-border mergers, using the Walmart-Massmart transaction as a primary case study.

• South Africa's trade policy has shifted from a bold liberalisation strategy after 1994 to a more cautious approach focused on domestic development and employment creation. The 2010 trade policy and strategy emphasizes the manufacturing sector, using import tariffs as a selective tool for industrial policy rather than as a primary revenue source.
• The Competition Act No 89 of 1998 established an independent three-tier institutional architecture consisting of the Competition Commission (investigatory), the Competition Tribunal (adjudicatory), and the Competition Appeal Court (review). This replaced the 1979 regime where the Competition Board lacked independence and the minister of trade and industry held final decision-making power.
• South African competition law is unique for its explicit inclusion of public interest considerations, allowing authorities to evaluate the impact of mergers and practices on empowerment, employment, and the viability of small and medium enterprises.
• The Walmart-Massmart merger illustrated the tension between domestic public interest goals and international trade obligations. While the Competition Tribunal conditionally approved the merger on May 31, 2011, it had to ensure the conditions did not violate WTO national treatment obligations under GATT Article III or GATS market access commitments.
• The Competition Tribunal's conditional approval of the Walmart-Massmart merger included specific mandates: a two-year ban on retrenchments, preference for re-employing 503 previously retrenched workers, honoring existing labor agreements for at least three years, and the creation of a ZAR 100 million development fund for local suppliers.
• South Africa's competition law has extraterritorial reach, covering economic activity that has an effect within the Republic. This was applied in cases involving soda ash exports from the US to Botswana and investigations into the USA Citrus Alliance regarding the fixing of citrus prices in the US.
• While South Africa generally resists including 'new generation' issues (such as competition and investment) in regional trade agreements, it is bound by the SACU agreement to apply competition policy and cooperate in enforcement. It is also a member of SADC, which signed a declaration on regional co-operation in competition and consumer policies in 2009.
• Inward FDI in South Africa has trended downward since the 2008 resource boom, though the total FDI stock grew from $43.5 million to $132.4 million between 2000 and 2010. Between 2005 and 2011, greenfield investments were more frequent and higher in value than cross-border mergers and acquisitions.
• The South African National Treasury proposed a review framework for cross-border direct investment to improve transparency and predictability for investors while safeguarding public interest, acknowledging that FDI is necessary for a low-savings developing economy.

APA

Hartzenberg, T. (2012). Perspectives on Trade, Investment and Competition Policy in South Africa. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2012/03/Occasional-Paper-111.pdf

Chicago

Hartzenberg, Trudi. Perspectives on Trade, Investment and Competition Policy in South Africa. South African Institute of International Affairs, 2012. https://saiia.org.za/wp-content/uploads/2012/03/Occasional-Paper-111.pdf.

Wikipedia

{{cite report |last1=Hartzenberg |first1=Trudi |title=Perspectives on Trade, Investment and Competition Policy in South Africa |publisher=South African Institute of International Affairs |date=March 2012 |url=https://saiia.org.za/wp-content/uploads/2012/03/Occasional-Paper-111.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{hartzenberg2012perspectives, author = {Hartzenberg, Trudi}, title = {{Perspectives on Trade, Investment and Competition Policy in South Africa}}, institution = {South African Institute of International Affairs}, year = {2012}, month = mar, url = {https://saiia.org.za/wp-content/uploads/2012/03/Occasional-Paper-111.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }