It could wipe out entire industries
in a worst-case scenario
IS EUROPE out to eat
SA alive - and how do we protect ourselves against the fiery onslaught of their manufacturing might?
Is the proposed new anti-dumping legislation our sole protection barrier?
This triple-barrelled question arises if certain fears (or joys, depending on which side you're on) about the proposed free trade pact between SA and the European Union (EU) are realised.
Which raises a fourth question. Is Minister of Trade and Industry, Alec Erwin on a deadline dating for signing the pact - and is he prepared to take the possible pain in expectation of compensatory and/or future gain?
FTW - in discussion with senior sources both here and in Europe - has been warned by the SA-based experts that free trade works both ways. And, when the pact is finalised, the SA locked-gates would be open to a flood of European imports that could wipe out entire industries (a worst-case scenario). The overseas sources, of course, were overjoyed at the prospects of duty-free export movement into the SA market - and their added price-competitiveness.
From the Europeans' point-of-view, the current GSP (general sales preference) agreement - which allows favourable or duty-free access to certain SA exports to Europe - would just be absorbed into the free trade pact. A few extra product categories would get preference, but nothing likely to cripple any European producer counterparts.
And there is certainly a lot more to this pact than just the trade issues.
A local source - closely in touch with the thinking at senior levels - reminded FTW that the European negotiators had made it clear at the start of discussions (now in their fourth year) that there was whole bag of issues to be discussed. Not just pure trade issues - but including other concessions and tit-for-tat bargains.
We have already pointed out that the latest port and sherry finagling between SA and Europe (especially the owner of those two names, Spain), is one of these tits - for which there needs to be a tat. Pieter Haasbroek, group economist at Barlows, told FTW that European negotiators in his ken had suggested that fishing rights for the Spanish trawling fleet - known as rapists of the seas in European fishing grounds - would be a fair tat for SA's use of the product descriptions port and sherry on their equivalent beverages.
But, in such an agreement, he added, we are giving up rights to Europeans that would allow them to strip increasingly-scarce SA assets. All this for the use of a name or two.
And it is likely to be only one of the tit-for-tats that are still in the European dealers' pack of cards.
A fear in the SA business community, according to a local observer, was that SA has mainly focused on the trade issues from a local perspective - and the Department of T&I might be now pushing to get the latest draft signed and sealed.
But they might be signing off that other bag of issues without full consideration - an event which could return to haunt SA.
It would open the trade portals to SA. Now a market with only the vestiges of its previous protective duties and
other barriers - and not much chance to re-introduce any of them if we wish to remain faithful to the conditions of the WTO (World Trade Organisation).
