Trade and Industry Minister Rob Davies has been speaking on the forthcoming BRICS summit, and revealed that ZA is still lobbying for the new BRICS Development Bank to be located in Johannesburg.
He also confirmed that the substantive negotiations on a new trade deal between SA and its regional partners with the EU are over. Signing should be soon, and then it would be ratified – assuming all involved can agree to what has now been decided. (Some technical talks are still continuing). One notable victory is that the EU will recognise the uniquely South African nature of roobos tea, which some overseas players have tried to poach.
Davies said BRICS leaders will take the final decisions on the BRICS New Development Bank, as he called it. The Heads of State will take the decision on its location. SA has put forward ourselves as a potential domicile for the Bank. The Bank will not just provide financial support for projects in BRICS countries, but in other developing countries. Africa has a significant funding gap and we are looking to the BRICS bank to play a part. The mandate of the Bank will not be limited to the BRICS countries themselves. In the framework of the integration of the African continent, we are going for free trade areas, and going for a continental FTA. We must address the infrastructure inadequacy, which is one of the barriers to regional trade. SA has indicated our willingness and desire to offer Johannesburg as a host domicile. We have a robust and significant financial sector in ZA, which is also involved in the African continent. For the functioning of the institution and some of its key roles, being located in SA would be a huge advantage from the point of view of the efficacy of bank to fulfil that role. One of the focuses will be on Africa and locating it in Johannesburg would be a huge advantage. Our prime motivation and argument is the ability to play that role in an optimal manner.
Davies said work needs to be done to alter the pattern of SA trade with the other BRICS, which has seen massive increases. China is SA’s number one trading partner, India is in the top 10 and Brazil and Russia have risen in the league. The nature of that trade is largely that we supply unprocessed and unbeneficiated mineral products, and we import from the other BRICS value-added products. That has to change. There is a structural imbalance. That imbalance is that we import value added products and don’t export value added products. We want more Chinese buying missions and to encourage active investment. Just yesterday we saw a new Chinese automotive investment in Coega, to manufacture medium and heavy commercial vehicles. That is what we have been seeking. The BRICS Business Council is discussing the aircraft industry.
EU Negotiations on a new trading partnership:
Davies said both sides have accepted there is nothing more to be achieved by further technical engagements, except for a few tiny technical matters to be sorted out. The sealing of the negotiation process is on the cards. Together with other SACU states, we will say whether the decision is yes or no, without changes. It will mean the EU will be able to initiate its own processes, to avoid trade disruption (for some of South Africa’s neighbours). SA will have secured extra access for sugar, wine, ethanol and some fruit products – not total duty free access. We have to recognize EU geographic indicators in return, on wine, alcohol, cheeses, and some meat products. Europe, in turn, will recognise a number of ZA wine names, as well as rooibos, honey bush tea and Karoo lamb. Davies said of the negotiations that you come to a stage when you say: we have gone as far as we can. A few technical matters have to be solved but we agree we have gone as far as we can in substantive process. It is now a yes or no decision. In or out? The process of initialling, to seal the negotiation – we are moving into that now.
Davies was speaking in Parliament, on a link to the Government’s Communications Centre in Hatfield, Pretoria. Journalists in Pretoria were not even offered a glass of water, and no coffee or tea. ZA Confidential does not advocate the squandering of taxpayers’ money, but the lack of hospitality by these bureaucrats defies belief.
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