Services are increasingly central to economic activity across the developing world, and South Africa is no exception. By African standards, the South African economy is quite diversified and has a robust services sector that in some areas exports competitively, to developing countries and to developed markets. One would therefore expect to find the South African government assertively advancing these export interests through international trade negotiations, while selectively liberalizing access to its domestic services markets in order to ensure their long-term competitiveness and to promote economywide benefits. While there has been some movement in the latter direction, largely through unilateral reforms, in recent years this has not translated into a proactive services trade negotiating strategy.

This chapter explores the reasons for this anomaly, adopting a political economy approach. We argue that the government's negotiating logic in multilateral negotiations is dually informed by the notions of developing country solidarity and the need for developed countries to make the most substantive concessions in order both to fix perceived imbalances in the system and because developing countries need more policy space. This logic inhibits the elaboration of offensive positions in the Doha Round of WTO negotiations with respect to other developing countries, particularly in Africa. It does not explain, however, why South Africa has not overtly developed offensive positions vis-à-vis developed countries, which are the major markets for South Africa's services exports.