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Motor industry changing US-SA trading pattern

26 Jul 1996 - by Staff reporter
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US trade figures for the first four months of the year show a deficit for South Africa, according to the latest US State Department figures.

Exports rose to $1,04bn this year from $855m in January to April last year.

South African exports have also risen from $645m to $732m. However, the South African trade deficit has also increased from $201 to $296.

Businessmap director Jenny Cargill says the Americans are clearly interested in increasing business.

American foreign direct investment is way above other countries, although this is mostly in softer areas like franchises, entertainment and leisure, she says.

There is a snowball effect from investment, as it leads to greater amounts of trade. Cargill says that as interest in South Africa grows American companies could begin to test the market by selling products ahead of setting up manufacturing plants, creating additional trade opportunities.

She said the motor industry would probably benefit the most in the short term. American motor manufacturers in South Africa were reducing the range of models they produced here and would import for variety.

This would enable them to simplify production runs and export the surplus.

The South African government is quite keen to see South Africa as a base for export, but most foreign companies are only interested in the local market she says.

However, when investments in fixed plant and machinery begin to take place, South Africa will see a rapid increase in exports

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FTW - 26 Jul 96

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