Last month, China’s General Administration of Customs released its customs data for 2023. The data showed that China’s total trade with Africa grew a modest 1.5 percent in 2023, reaching $282.1 billion, but Africa’s trade deficit with China widened. While Chinese exports to Africa reached $173 billion, an increase of 7.5% over 2022, Africa’s exports to China fell 6.7 percent to $109 billion.
Given these figures, it was welcome news that last month China reduced import duties on South African Rooibos tea between 15 percent to 30 percent down to 6 percent. Despite being South Africa’s largest trading partner and one of the world’s largest consumers of tea, China’s high tariffs on South African Rooibos tea mean that China was only South Africa’s seventh highest export destination in 2023, and before that, it didn’t even make it into the top 10 for its famous healthy caffeine-free tea.
In comparison, China’s neighbor Japan, despite implementing a 17 percent tariff for Rooibos tea, it is South Africa’s top export destination for Rooibos tea as of 2020 because Japan has a large market for healthy tea. Japan is followed by European countries such as France, Germany and the Netherlands who offer zero tariffs for South African Rooibos teas as part of the Generalized Scheme of Preferences for developing countries.
Given the size of China’s consumer market, China’s decision to cut tariffs on South African Rooibos tea by almost 80% could make China a priority export market in the future. He couldn’t do that alone help reduce the trade deficit between South Africa and China, but also, if branded Rooibos products enter China, it could give South Africa an opportunity to boost its job creation and value-added exports to China. South African Rooibos Industry produces approx 20,000 tons per year and employs 5,000 people.
That said, there is one major challenge to this ambition: Recognition of South Africa’s Geographical Indications (GI), including the GI for Rooibos tea.
GIs provide distinct rights to the “qualities, characteristics or reputation of the product that are primarily attributable to the place of origin,” according to the World Intellectual Property Organization. In other words, GI protection allows producers to raise retail prices. Well-known examples include French champagne and brie, English cheddar and Italian prosciutto di Parma ham, which are recognized in many countries and regions, including China.
Rooibos and other African products such as South African wine and Benin sugarloaf pineapples fall under the category of eligible geographical indications. On supermarket shelves, GI recognitions mean these products must be original – others can’t make versions of them, and businesses selling these products can ultimately command higher prices, which means higher incomes in African countries.
China became Africa’s first partner to commit to developing a recognition process for African GEs at the eighth Forum on China-Africa Cooperation (FOCAC) in 2021, but so far no clear process has been revealed. With the ninth FOCAC expected to take place at the end of 2024, and with the welcome push towards opening up China’s market to African products in recent years, African leaders must ensure that a clear strategy to implement a GI recognition process of Africa will reach the FOCAC 9 Agenda.
There are already several Chinese companies importing raw Rooibos tea leaves into China and packaging them under their own brands. Pushing for the recognition of African GIs and the export of GI products such as Rooibos tea can help African countries compete with other regions in the Chinese market and create space for distinct higher value African products to enter the Chinese market.
Fortunately, and with the recent tariff reduction as a sign of goodwill and interest from China, South Africa is well placed to lead the push for China to recognize African GIs. The South African Customs Union (SACU) has already secured recognition of the GI status of Rooibos tea in the European Union in 2014 and The UK also continued to recognize its GI after Brexit. SACU can apply lessons from its negotiations with the EU and work with other African regional bodies, including the African Continental Free Trade Area Secretariat, to negotiate GI agreements with China.
Indeed, an audience The African strategy to implement the FOCAC 8 commitment, perhaps using Rooibos as a starting point, could make some difference in closing this trade deficit in 2024, so that both the volume and value of African exports to China steadily increase in the future.
