‘It’s about
trade
liberalisation ‘
Alan Peat
A RECENT report that the SA motor industry development programme (MIDP) could be challenged by the World Trade Organisation (WTO) is creating a mountain out of
a molehill, according to Nico Vermeulen, executive director of the National Association of Automobile Manufacturers of SA (Naamsa).
In a recent media report Ford SA c.e. Deborah Coleman was quoted as saying that foreign manufacturers - worried about losing market share to SA producers - could report this country to the WTO.
“If other countries believe they are losing business
to SA because of the MIDP,” Coleman is quoted as saying, “they could go to the WTO.
“Where would that leave the industry in SA?”
But, said Vermeulen, this could be no more than a piece of journalistic extension of the facts.
“In all the years that we have had the MIDP there has never been a complaint. Why should there be one now?”
Not that Naamsa writes off the possibility of a challenge. But, said Vermeulen, only a country can complain and only when it feels that a sector of its economy is being prejudiced.
“Our line of argument is that there’s no government hand-out.
“It only allows import duty that has already been raised to be rebated against export performance.”
The MIDP, according to Vermeulen, does everything right as far as WTO thinking is concerned.
“The WTO is all about trade liberalisation and this import/export facilitation is such.
“It encourages exports which, in turn, encourages more imports.”
The MIDP is an attempt to “exploit comparative advantage”, and he feels that the risks are “quite manageable”.
