It's a move to address trade imbalance
THERE ARE hints that SA is likely to ease some import duties on goods from SADC (Southern African Development Community) countries before year-end.
At a breakfast meeting earlier this year with JCCI (Johannesburg Chamber of Commerce and Industry) members, Minister of Trade and Industry Alec Erwin suggested that the government would like to implement the first stages of the proposed free trade agreement in the SADC region for the start of the new millennium.
This could lead to the immediate scrapping of import duties of less than 17%, according to an observer from forwarders Safcor, and a five-year phase-down for higher duty rates.
This could go some way to relieving the pressures from neighbouring states to grant them easier access to the SA market - one which they claim is unfairly restricting their export potential, while SA feeds off its own ever-growing export trade into these countries.
These warnings are also often accompanied by further threats of "boycotts of SA goods", "alternative import sourcing" and other unlabelled penalties. But what it boils down to is that there is a hideous imbalance in favour of SA export trade - with SA products being ultra-competitive in the African market - and the poorer African states require help in balancing this up with their own export trade.
Erwin seems clearly aware of this. At the meeting he pointed out that exports to the SADC region had more than trebled in just eight years. The SADC, as FTW figures continually show, is this country's fastest growing export market - despite a decline in exports last year when the repercussions of the Asian and developing markets' financial crises were in full flow.
But, said Erwin, while the SADC represented 11% of SA's total export volume, imports from the region only come to 2% of the SA import total.
The imbalance was such, he added, that SA exports to the region would become unsustainable unless these countries also began to export in more quantity.
As a supportive measure for the smaller enterprises in SADC countries which are struggling to compete, Erwin suggested that government focus was now on ways of allowing easier access to the SA market for SADC exporters.
Erwin also pooh-poohed fears amongst some local industrialists that assistance to SADC exporters might see them taking an edge over local producers. Low wages in other SADC countries might make apparent production cost cheaper, but, according to Erwin, this did not necessarily make those countries competitive in skilled manufacturing.
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