Trade benefits from new agreements

TWO RECENTLY established trade agreements - the European Union (EU) free trade agreement and the US African Growth and Opportunity Act (AGOA) - have had a measurable benefit for SA trade, according to Sacob (SA Chamber of Business). So much so, its trade survey asserted, that "SA's foreign trade position is increasingly becoming more upbeat - and, in fact, bucks the trend of the world economic slowdown". Both imports and exports illustrate the trend, Sacob added. One example cited is that SA has the advantage of local production in "soft" currency - but earns in "hard" currency for exports. Underscoring this, according to Sacob, is the development of niche markets, and especially the growth in agri-processing and the automotive industry. Another indication of this positive trade trend is to be found in the Standard Bank/Sacob trade survey - based on trade perceptions. It is picking up, according to the chamber. "The stabilisation of the rand during June," its report added, "also created a certain and stable environment favouring foreign trade." Sacob also views an expected drop in the fuel price in the near future with favour. It will be a "further contributing factor assisting in up-beat consumer sentiment", it said - especially on the demand side of the economy. And to this you can add the recent interest rate cut. But Sacob calls on the government to stick to its privatisation priorities - a means of generating a "much-needed inflow" of foreign capital. It expresses dismay, therefore, at Telkom's listing being delayed until next year. However, another positive development in June, the chamber suggested, was President Thabo Mbeki's visits to the UK, US and Germany. These, Sacob believes, have "illustrated the importance with which those countries view SA" - and that "SA is seen as one of Africa's major economic players".