Summary: GAO discussed trade with South Africa, specifically: (1) changes over the past 5 years; (2) changes in public and private credit availability; (3) the status and implementation of U.S. disinvestment from South Africa; and (4) U.S. dependence on South African strategic minerals. GAO found that: (1) between 1982 and 1987, South Africa's exports to its 24 partner countries decreased slightly, while its imports from them decreased substantially; (2) most of South Africa's trade was with the United States, the United Kingdom, West Germany, France, Italy, and Japan; (3) although those countries supplied 84 percent of South Africa's exports and imports in 1982, and 82 percent of the imports and 81 percent of the exports in 1987, some shifting of market share occurred within the six countries; (4) the United States and the United Kingdom decreased their shares of imports and exports, while Japan increased its share; and (5) South Africa was unable to redirect exports under U.S. sanctions, resulting in total trade losses of $624 million. GAO also found that: (1) individual countries' loans to South Africa decreased due to South Africa's perceived political instability, poor economic performance, and its 1985 freeze on debt repayments; (2) although the political and economic situation in South Africa decreased lending from Western banks, U.S. bank lending increased in the first 6 months of 1987 and should continue as the lending climate improves; (3) international banks held $16.12 billion of South Africa's $23-billion debt, while the rest was in bond issues or debts to foreign nonbanks and international institutions; (4) 162 U.S. companies have withdrawn from South Africa since 1984; (5) of the 150 companies with direct investments or employees in South Africa, 9 have announced their intention to withdraw; (6) except for six strategic minerals, alternative supply sources exist for the certified strategic minerals the United States imports from South Africa; and (7) the 5-year cumulative direct economic cost of a U.S. embargo on South Africa for the six strategic minerals would total $9.25 billion.
