FTA will boost unexplored potential

SA TRADE with the 10 new EU states is not yet at all well developed. It currently sits at a total of R500-million in 2003 - about equal to SA’s trade with Sweden. “They are also markets we haven’t yet explored in any depth,” says consultant Duncan Bonnett. “That trade total is about the same as our current trade with Madagascar, he added, a country with a GDP of about US$3.5-billion. The total GDP is US$330-bn for the 10 new EU members, with US$254bn emanating from just three of them, Poland, Hungary and the Czech Republic. “This rather underlines what we’ve done there up to now.” And, giving an indication of SA trade with the new bloc, Bonnett quotes the comparative figures for SA’s exports to the 10 in 2002. Machinery and mechanical appliances totalled 22% of the exports; textiles and articles thereof, 22%; base metals and articles thereof, 9%; stone, plaster and cement, 8%; vehicles, aircraft and transport equipment, 8%; prepared foods and beverages, 7%; mineral products, 7%; chemicals, 7%; and plastics and articles thereof, 4% - with a balance of 6%. But there’s room for development, according to Bonnett, with the one initial boost for SA exporters in duty free entry to these 10 states, under the SA/EU free trade agreement (FTA). Not that it’s going to be “a seismic shift”, he added, as these countries have already been adjusting their tariff structures downwards to comply with the EU demands. But it does add an element of price-competitiveness compared to SA opposition in Latin and South America, Asia and Australasia. A new market well worth exploring, said Bonnett.