Alan Peat
THE BUSINESS world should wake up to the SA/European Union (EU) trade pact, before all our advantages are lost to others with similar agreements with Europe, according to Riaan de Lange, manager of the international trade consultancy at Deloitte & Touche.
Following hot on the heels of the conclusion and ratification of SA's free trade agreement (FTA) with the EU, he told FTW, the latter has concluded a similar agreement with Mexico.
This should serve as a wake-up call for SA business that our trade development and co-operation agreement (TDCA) is not an exclusive arrangement - but that the EU is pursuing a number of these agreements with other countries.
This puts Mexico - often used as a comparative with SA in government trade and economic analyses - in a rather advantageous position compared to this country. Said De Lange: This latest agreement makes Mexico the only country in the world that has FTAs with North America - under the North American Free Trade Agreement (NAFTA) - the EU and the Latin American countries.
But we may be playing a catch-up game, he added.
The SA government has started to explore the possibility of concluding a similar agreement with the Common Market of South America (MERCOSUR), De Lange said. The member countries of this trade bloc are Argentina, Brazil, Paraguay and Uruguay - while Bolivia and Chile are associate members.
Pursuing relations with South American countries is in line with the government's butterfly approach to trade.
The strategy behind an association with the South American bloc is that they are amongst the other nations that are earmarked by the EU for a free trade alliance.
Indeed, there are a number of already-existing agreements - albeit some with limited provisions.
In Latin America, the EU has a co-operation agreement with Argentina, Brazil, Chile, Mexico, Paraguay and Uruguay. It also has a non-preferential trade, economic and development agreement with Bolivia, Colombia, Ecuador, Peru and Venezuela.
As for Central American countries, the EU has a non-reciprocal co-operation agreement with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama.
The EU, said De Lange, is presently in the process of negotiating a number of agreements - such as one with MERCOSUR - to conclude a FTA.
The EU negotiations precede those of SA.
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