SA picks up on South America potential

Although trade with South America is only 2% of SA's total trade, much of it is with the Southern Common Market (Mercosur). This is a regional trade agreement (RTA) between Argentina, Brazil, Paraguay and Uruguay. Bolivia, Chile, Colombia, Ecuador and Peru currently have associate member status, while Venezuela signed a membership agreement in 2006 – and trade ties are expected to grow substantially in the future Ibsa agreement. Added to that is the Ibsa agreement between India, Brazil, and SA – and this three-way agreement is beginning to take shape five years after it was initiated. Combined trade at the end of last year reached over R76-billion – with the three countries expecting to achieve a target of R120-bn by 2010. On the trade and investment front, automobiles and pharmaceuticals were identified as the two industries with the most potential. SA trade with Chile, Colombia, Argentina has also continued to show steady growth in various sectors – with forestry and mining taking leading roles. SA’s two major individual trading partners in the Central and South American region are Brazil and Mexico. In SA exports to Brazil, the products reckoned to have the best potential are coal, nickel plates, insecticides, interchangeable tools, containers, steel, yarn, household furniture and uncoated paper and paperboard. Another area of promise is in technology exchange, with Eduardo Tadao Takarashi – a consultant to the Brazilian government on technology affairs – recently reported as saying that there was huge potential for this exchange between the two countries. Meantime, Mexico is reportedly SA's second largest trade partner in the Central/South American region, with trade between the two countries having grown steadily since 1993, and with SA now Mexico's largest trading partner in Africa. A notable development is the increasing diversification of goods and the fact that trade between the countries is complementary. However, there is a feeling that official trade figures are not the whole truth, and do not reflect the exact extent of trade between the two countries. This because an enormous amount of trade is triangulated through America and Europe, leading to some suspected inaccuracies.