logo logo

South Africa: trade talks

Business Day (Johannesburg) | 19 October 2007


South Africa: Trade Talks

THERE has been a flurry of activity on the trade scene over the past week, with SA hosting India and Brazil in a high- level summit to boost trade relations among the troika, and our top trade bureaucrats travelling to Mozambique to meet delegates of the European Union.

The purpose of the trip was to bring fresh impetus to crucial economic partnership agreement talks — a deal that needs to be wrapped up before the end of the year if trade is to continue without costly disruption.

But how much of these efforts is translating into real trade facilitation, easing the way for the private sectors of these countries to do business with each other? Precious little, it seems.

While it is not yet clear what trade negotiators have conjured up in Mozambique to salvage trade relations with southern Africa’s most important trading partner, the much-vaunted India-Brazil-SA (Ibsa) summit appears to have been a damp squib.

It yielded a range of agreements between the partners, but the issues at stake are decidedly uninspiring. Agreements were reached on matters such as cultural co-operation, higher education, human resources, co-operation on social issues, health and medicine, public administration and government.

But there has been hardly any mention of the subjects that might promote trade and attract the attention of traders. The easing of tariffs, for instance, or a policy review that may lead to breaking down nontariff barriers.

The Ibsa partners have been talking about closer trade collaboration for years now, so the apparent lack of progress is disappointing. But it may also point to a general malaise within SA’s trade negotiations that could have negative longer-term implications.

SA has been negotiating a slew of bilateral agreements for a long time. There is the failed pursuit of a free trade agreement with the US, which has now been watered down to an agreement to explore co-operative trade opportunities. The economic partnership agreement talks are part of the mix, as are talks with the Mercosur trade bloc of South American countries, which seem to have been dragging on endlessly. SA then wants to dovetail the Mercosur process with talks with India in pursuit of the much-promised Ibsa trilateral free trade agreement.

Yet we don’t seem to be able to dot the i’s and cross the t’s on any of these so that the business of trade can get going in earnest.

Then there is the European Free Trade Association free trade deal with Switzerland, Norway, Iceland and Liechtenstein, a process that has been completed and signed off, but has still not come into force. And on top of that, the all-important Doha round of World Trade Organisation talks demand the South African negotiators’ attention.

Trade commentators have expressed concern about whether SA has the capacity to negotiate all these deals simultaneously — bite off more than you can chew, and you risk making a hash of things. If that is indeed the case, and there are worrying signs that it is, the situation could get worse before it gets better. In addition, the trade and industry department recently indicated it was preparing to embark on exploratory trade talks with China.

It may be wise for the bureaucrats to digest what is on their plates — and lock in those benefits that are of real value to traders — before ordering any more courses.