logo logo

SA signs free trade pacts in Middle East

Business Report (South Africa)

SA signs free trade pacts in Middle East

September 27, 2005

By Andile Ntingi

Johannesburg - South African exporters will now have more access to Kuwait’s market after trade and industry minister Mandisi Mpahlwa yesterday signed a free trade agreement with the oil-rich Middle East country.

The deal with Kuwait was concluded a day after Mpahlwa signed a free trade agreement with the United Arab Emirates (UAE), also an oil producer.

Mpahlwa is on a four-day visit to the Middle East whose objective is to boost trade with the region and address the growing trade imbalance that exists between the Mideast and South Africa.

Mpahlwa will wrap up his tour to the region, which started on Sunday, by visiting Bahrain today and finally Yemen tomorrow.

Mpahlwa is accompanied by a 30-member business delegation.

Middle East exports to South Africa - mainly crude oil and petroleum products - represent about 6.1 percent of the country’s total imports, while nearly 2 percent of South African exports make their way to the Mideast. South Africa sells agroprocessed products, minerals and military equipment to the region.

However, the Middle East enjoys a trade surplus with South Africa. Local exports to the region totalled R10.3 billion last year, while imports from the Middle East reached R37.7 billion.

"We want to address the trade imbalance that exists between us and the Middle East, and we also want to draw investment from that region into the South African economy," said Sihle Shange, a director responsible for North Africa and Middle East at the department of trade and industry.

The economic deal that South Africa entered into with the UAE will include co-operation in areas such as trade, industry, agriculture, transport, petroleum and petrochemicals, telecommunications, education, scientific research, technology, tourism and investment.

In a telephonic interview with Business Report, Mpahlwa said he would aim to develop close economic ties between South Africa and the financial hub of Bahrain.

"We have a strong financial sector in South Africa and I hope we can interest Bahrain. We are going to sign an investment protection agreement and an agreement on avoidance of double taxation," said Mpahlwa.

"One of our objectives is to attract some of the petro dollars for investment in South Africa. There is a tendency to look to China for investment, but there are also a lot of investment opportunities in South Africa."

Mpahlwa said he would also be looking to open market opportunities for South African arms manufacturers to supply military equipment to the Middle East.

 source: Business Report