In brief

The 2025 Export Block Exemption, introduced by South Africa’s Minister of Trade, Industry and Competition, provides a five-year legal framework allowing firms to coordinate strategically in export markets — such as through joint marketing, logistics, and infrastructure development without breaching competition laws. Aimed at countering rising global tariffs and trade barriers, the exemption includes strict safeguards against anti-competitive conduct and mandates the inclusion of historically disadvantaged persons (HDPs) and SMMEs in all agreements. By enabling collective action, the exemption seeks to enhance the global competitiveness of South African exports while promoting inclusive economic participation.

In depth

In response to the imposition of tariffs on South African exports, the Minister of Trade, Industry and Competition has published a Draft Block Exemption for the Promotion of Exports, 2025. This exemption is a proactive legal mechanism designed to enable South African firms to strategically coordinate in export markets without breaching domestic competition law.

The exemption will temporarily suspend the application of sections 4(1)(a), 4(1)(b)(i), 4(1)(b)(ii), and 5(1) of the Competition Act, allowing firms to engage in conduct that would otherwise be prohibited, such as joint marketing, logistics pooling, and infrastructure development. These coordinated activities are core to the project of enhancing the global competitiveness of South African goods.

In the current international trade climate, South African exporters face rising costs and diminishing access to key markets. The exemption will provide a legal framework for firms to respond collectively, efficiently, with strategic agility and at scale in relation to initiatives that drive exports in international markets. In particular, it will permit a narrowly defined set of coordinated activities, strictly limited to export markets, to enhance the competitiveness of South African firms. These include:

• Coordination to achieve economies of scale and efficiencies in export markets, with the objective of improving the competitiveness of South African export products
• Coordination to share or offset landed costs incurred in export markets, helping firms manage price pressures and improve market access
• Coordination on joint financing and development of export-related infrastructure, including facilities within South Africa, transit points, and infrastructure at export destinations
• Coordination on funding and sharing export-related market information, such as import regulations and product standards applicable in foreign jurisdictions
• Coordination on sharing logistics costs, including shipment, storage, inspection rooms, freight, insurance, and other export-related services
• Coordination on collective marketing of South African goods as a unified brand in export markets to enhance visibility and competitiveness
• Coordination on joint negotiation of export programmes and compliance with international quality specifications or standards required in export markets

These activities are designed to counteract trade distortions and enable South African firms to navigate increasingly complex global supply chains more effectively.

The draft exemption is narrowly tailored and includes robust safeguards to prevent abuse:

• Prohibited conduct includes market allocation, collusive tendering, resale price maintenance, and merger transactions.
• Firms will need to obtain confirmation from the Competition Commission prior to implementing any exempted agreement. The Commission will have 30 business days to respond, failing which the agreement will be deemed confirmed.
• The Commission will retain the authority to revoke confirmation if the conduct exceeds the scope of the exemption or violates its terms.
• Firms will be required to maintain accurate records and notify both the Commission and the DTIC within seven business days of implementation.

These procedural requirements will ensure that the exemption remains transparent, accountable, and consistent with public interest objectives.

A defining feature of the draft exemption is its mandatory inclusion of firms owned by historically disadvantaged persons (HDPs) and small, medium and micro enterprises (SMMEs) in all negotiations and agreements. This requirement aligns with South Africa’s constitutional and statutory imperatives for inclusive economic participation and is particularly relevant in the context of escalating global tariffs and trade protectionism. SMMEs and HDP firms are often least equipped to absorb the cost shocks and market disruptions caused by sudden tariff increases. By mandating their inclusion, the exemption will ensure that these market players are not excluded from coordinated export strategies and are able to benefit from collective efforts to mitigate the impact of tariffs.

The exemption will remain in effect for a period of five years, offering South African firms a sustained legal framework to respond to prevailing trade conditions. This duration is strategically important, providing exporters with the regulatory certainty needed to plan and implement long-term collaborative export-related initiatives. By enabling coordinated conduct over a multi-year horizon, the exemption will support enduring competitiveness and reinforce South Africa’s capacity to withstand and adapt to evolving trade protectionism.

The 2025 Export Block Exemption builds on a well-established regulatory precedent. Similar exemptions were issued to address systemic disruptions during the COVID-19 pandemic and the electricity supply crisis. These interventions demonstrate the DTIC’s ability to deploy competition law as a flexible policy tool in times of economic uncertainty and stress.