Rumours of MIDP demise crushed

‘No question of SA doing away with the programme’ ALAN PEAT THERE HAS just been “too much nonsense written in the press” on last year’s protest from the Australian government about exports from SA to Australia under the Motor Industry Development Programme (MIDP), according to a senior motor industry source. The problem was resolved in bi-lateral talks between the two governments last October, he added, “but the media has continued to stir things up”, has created an entirely wrong impression of what the problem was about, and raised mistaken perceptions of the future of the MIDP. The inside story of the Australian protest, according to the source, was a simple piece of business strategy. He told FTW that it involved an Australian company which had a contract to supply stitched leather seats to one of that country’s major motor car manufacturers. But a South African company won the contract – based entirely onquality and price, according to our commentator. However, the Australian leather company alleged that the contract was won with the support of the MIDP – and the issue was raised by the Australian government in a communication with the SA authorities. “It got as far as it did because the SA government was a bit slow in reacting to the protest, but it was eventually settled amicably on a bi-lateral basis,” said the FTW source. “Our government agreed to restrict MIDP support for leather exports to Australia from January 1, and it’s now back to business as usual.” But the fact that the MIDP was up for review this year, added to the Australians having raised the issue of the programme possibly having contravened the World Trade Organisation’s (WTO’s) liberalisation of trade, led to the press suggesting that the MIDP might be on its way out. However, said the source, it had been agreed three years ago that the MIDP would be reviewed in 2005. “This,” he added, “is to evaluate the performance of the motor industry under the MIDP, and to improve it where necessary. “Also, if the MIDP has to be tweaked to fit in with the WTO, then this will also be done.” But there was no question of the SA government doing away with the programme. “They have publicly stated that they will support the motor industry under the MIDP,” said the motor industry spokesman, “and the plan is to complete the review with reference to all the stakeholders by the end of this year.”