In the ten years since the end of apartheid, the South African government has taken significant steps to liberalize trade and capital transactions. As a result, the volume of trade and gross international capital flows has increased significantly. This chapter describes the main steps and sequencing of this liberalization process. Later chapters will discuss particular aspects of the functioning of the liberalized trade and capital account regime, such as the determination of the real exchange rate, the role of reserves, and so on.
The overall conclusion of this chapter is that the liberalization process has been successfully managed: the gradual reduction of external tariffs and the progressive opening of the capital account have allowed the domestic markets to adjust relatively smoothly to the new opportunities and challenges. South AfricaвЂ™s approach to both trade and capital account liberalization has
been careful yet determined, aimed at maintaining a reasonable balance between internal economic development and external liberalization. In the international arena, South Africa has urged that multilateral trade liberalization be undertaken so as to increase the benefits to a broad range of developing countries. It has, for example, advocated an increase in the access to
industrial countriesвЂ™ markets for agricultural products.