Exporters urged to make use of Block Exemption for Promotion of Exports

The publication of the Block Exemption for Promotion of Exports, enabling South African exporters to collaborate in pursuing international markets, will not benefit them unless they make full use of the regulation. 

This is according to the Director of Export Development and Support at the Department of Trade, Industry and Competition (the dtic), Kwanele Mkhwanazi, who addressed a webinar on the Block Exemption for Promotion of Exports co-hosted by the dtic and the Competition Commission of South Africa (CCSA) on Monday. 

The Block Exemption, promulgated by the dtic Minister Parks Tau, under the Competition Act, provides for specified categories of collaboration in export markets that are exempt from certain provisions of the Competition Act. 

These include opportunities for qualifying exporters to achieve economies of scale and efficiencies, share certain landed costs, export-related infrastructure and market information, coordinate logistics, collectively market South African goods and jointly negotiate or contract with foreign buyers where permitted.

The promulgation of the exemption is a direct policy response to deteriorating global trade conditions, including the imposition of broad-based tariff increases by key trading partners, rising logistics costs, and increased complexity in accessing alternative export markets. 

Mkhwanazi said South African companies have a joint responsibility with the government to broaden and strengthen the export ecosystem and to ensure that exporters understand the opportunities available to them and help grow the economy.

He emphasised the important role of Export Councils, industry associations and provincial export-support agencies in identifying such opportunities, given their knowledge of businesses and sector-specific challenges.

He added that the Block Exemption should be linked to the broader support available to exporters through the dtic and its partners, including the Export Help Desk, Export Councils and provincial partner networks, market intelligence, training, coaching and mentorship, incubation and acceleration programmes.

“South Africa's exports are still largely driven by larger firms, while smaller businesses remain less active in international markets. So, the opportunity before us is not simply to get more businesses into markets. 

“It is to help businesses enter, compete, retain and grow in those markets.  We need to think differently about the export ecosystem. A single company may struggle with the cost of areas like market research, overseas warehousing, logistics and international marketing. Collectively, there may be opportunities to share certain costs and activities, where permissible under the regulations,” he said.

The dtic and the CCSA have encouraged exporters and export-support formations to familiarise themselves with the requirements and limitations of the Block Exemption before entering into collaborative arrangements. 

The exemption applies to qualifying activities within its scope and does not provide a blanket exemption from competition law. – SAnews.gov.za

 

Source: Original report at SAnews.gov.za.