Analyst spells out many synergies in proposed pact

THERE ARE "lots of synergies" in the economies in the free trade area currently being discussed between SA and Mercosur member countries in South America, according to Liz Whitehouse of trade consultants, Whitehouse & Associates. There is particular synergy when you look at the economies of SA, Brazil and Argentina." Part of this Whitehouse sees in the affinity of the mining industries in the two groupings Ð again particularly between SA and Argentina, Brazil and Chile ("A huge player in mining", she said). This has been a traditional trade area, Whitehouse added, with a number of big mining and supply operations already having moved into the South American market. "There's also benefit for the rather different industries of leather and motor vehicles and components," she said, "with particular reference to Brazil when the second sector is considered." Plastics and chemicals are two other industry areas that immediately spring to the Whitehouse mind. "They are also two-way trade items," she told FTW, "with a pretty big chemical industry already in South America, and particularly Argentina." On the incoming side, SA would benefit greatly from reduced import duties on vegetable oils. "We get most of our edible oil requirements from South America," Whitehouse said, "which is imported raw in bulk and further refined locally." From the SACU point-of-view, mining has to be again a big player for some of the overborder members. "But," said Whitehouse, "Brazil is also currently a big supplier to Angola Ð which somewhat justifies the trade agreement from SACU's viewpoint." But overall, Whitehouse defines it as a logical move away from the traditional partners in Europe and the USA Ð spreading SA's trade dependence over a larger supply pool. It's south-to-south trade, she added, which has some benefits over the rather lengthier (and often considerably more expensive) trade routes in-and-out of the northern hemisphere supplier countries.