2009-10-14 tralac Newsletter
2009-10-14 tralac
Hotseat Comment
Willemien Denner, a tralac Researcher, comments on South Africa and Brazil furthering South-South trade.
Since the 1990’s Brazil and South Africa have gained prominence in international relations. This is attributed to the regional importance of the Brazilian and South African economies and increased financial and commercial liberalisation programs. Trade between South Africa and Latin America has also grown significantly over the last few years, with Brazil currently being South Africa’s largest trading partner in Latin America.
Recently President Jacob Zuma and the Department of Trade and Industry have reiterated the importance of furthering South-South trade for South Africa, especially trade with the Latin American countries.
President Zuma spoke at the South Africa-Brazil Roundtable Business Forum which was held in Brazil on 8 October 2009. The delegation included representatives of 45 companies which are interested in expanding trade and investment with Brazil in the areas of energy, mining, finance, infrastructure and pharmaceuticals. The President emphasised that South Africa has mainly focused their exports on raw materials to Europe and North America and that South Africa currently aims to find partners among the powerhouse economies of the South. African countries, including South Africa, have already established trade and investment cooperation framework arrangements with South American countries. These arrangements will enable South African businesses to explore the potential for trade and investment in Brazil, while providing opportunities for South African investors.
A Memorandum of Understanding (MoU) has also been signed by the Brazilian Ministry of Development, Industry and Foreign Trade and the South African Department of Trade and Industry. The MoU aims to promote trade and investment through the development of an implementation plan that will focus on the structuring of trade and investment initiatives to benefit both South Africa and Brazil.
The Department of Trade and Industry also identified the Latin American region as a destination for South Africa’s exports and have commissioned a study on the opportunities for increasing trade with Latin America. Although the results will only be discussed on Thursday this week, an important preliminary finding of the study is that the export potential to Argentina, Brazil, Chile, Mexico and Venezuela is estimated to be US $ 200 billion.
South Africa is also focused on the promotion of intra-African trade and investment. South Africa has become one of the biggest investors in sub-Saharan Africa in the sectors of mining, electrical power, financial services and telecommunications. Brazil is the driving force for the South American continent on the other hand. This makes the relationship between South Africa and Brazil important for the advancement of the broader development of the African and South American regions. According to President Zuma the global economic crisis has shown the need for the reconfiguration of the global economy. The development of South-South relations must be at the centre of this change. Countries like Brazil and China has been leading the shift in the global economic relations, contributing to the rapid growth of the share of developing countries in world trade.
The current trading relationship between South Africa and Brazil is exemplified by the following:
- The value of South Africa’s total imports from Brazil has increased by 2% from 2007-2008. In December 2008 the total value of Brazilian imports was approximately US $ 1.6 billion.
- South Africa’s exports to Brazil for the year 2008 represented only 1% of South Africa’s total exports to the world. However, South African exports to Brazil grew by 26% in the period 2007-2008.
- The top ten products, in terms of Brazilian imports represented 59% of the total South African imports from Brazil. The top product sector was exports of repaired imports; imports of returned exports (24%) followed by live animals, animal products (9%); animal or vegetable fats and oils (8%); machinery (3%) and food, beverages and tobacco (3%).
- The top ten South African products exported to Brazil represented 64% of South Africa’s exports to Brazil. The top five product sectors were base metals (19%); mineral products (16%); machinery (9%); chemical products (5%) and plastic products (4%).
- Although South Africa currently only exports a limited amount of their total exports to the Latin America region, exports to most of these countries, including Brazil, Argentina and Chile, have grown over the last few years. As South-South trade becomes increasingly important, Brazil has the potential to provide South African businesses with investment and export opportunities.
Source: World Trade Atlas; BuaNews
Special Features
Monitoring Trade and Climate Change
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News
COMESA takes on EU
The Common Market for Eastern and Southern Africa (COMESA) has challenged the European Union (EU) to devise a realistic, practical, and honest approach in its economic partnerships with Africa.
US services meeting draws Doha round players
Agriculture and manufacturing have long been at the centre of world trade talks, but will now take a back set to finance, telecommunications, and other service sectors at a meeting in Washington this week that has attracted top trade officials from the United States, European Union (EU), and India.
Kenya, SA seek stronger trade ties
South Africa and Kenya plan to launch a joint trade commission by the end of the year in an effort to guide investors on opportunities and increase the volume of trade between the two countries.
Dhaka looks to WTO meet to win African LDCs’ support
Bangladesh is currently in talks, both bilateral and multilateral, with least developed countries (LDCs) in Africa to gain support from them in winning a zero tariff facility for its major exportable items in the United States market.
SACU-Mercosur deal to lift trade
According to President Jacob Zuma, South Africa and other African countries have begun to explore more trading and export opportunities with countries in the South.
Services sector to benefit from EAC common market
A meeting of the multi-sectoral council of the East African Community (EAC) was held in Kampala recently during which a draft common market protocol together with eight annexes was adopted.
Germany urges Namibia to sign EPA
Germany this week urged Namibia to sign the controversial Economic Partnership Agreement (EPA) with the European Union (EU) as the deadline for the trade agreement draws near.
IMF, World Bank respond to calls for reform
The International Monetary Fund (IMF) and World Bank’s annual meetings ended in Istanbul this week amid calls for reform and reflection on the global economic crisis.
SA seeks stronger ties with Brazil
International Relations and Cooperation Minister Maite Nkoana Mashabane left for a state visit to Brazil on Tuesday, ahead of the arrival of President Jacob Zuma on Thursday and Friday. The minister is hoping to strengthen existing ties with the economically upward Latin American country.
Events
tralac at Rhodes University’s China Week: 28 September - 2 October 2009
Rhodes University held a China Week in Grahamstown from 28 September to 2 October 2009. This colloquium, which examined economic relations between Africa and China, was supported by the Confucius Institute at the University. Presentations and discussion rounds gave attending students an outline and assessment of the history, current trends and perspectives on China’s engagement on the African continent. Read more here...Updated: tralac Annual Conference 2009
The tralac Annual Conference 2009 Report and audio recordings of speakers' presentations are now available. Click here to access the Annual Conference 2009 page on tralac's website.The 47th Annual Conference of the Agricultural Economics Association of South Africa (AEASA)
The theme of the conference was “Promoting the competitiveness of South African agriculture in a weakened global economy”. Read more here...Publications
Anti-dumping on TOFA: Hopping a country too far?
New working paper: Anti-dumping on TOFA: Hopping a country too far? by Gustav Brink, a tralac Associate. The circumvention of anti-dumping duties has given rise to significant discussion on the topic in the World Trade Organisation. At present the WTO Anti-Dumping Agreement does not contain any anti-circumvention provisions and it is up to each country to regulate the use thereof. South Africa’s Anti-Dumping Regulations provide for several different forms of anti-circumvention, including country hopping, i.e. where an importer switches supply from a producer in one country to a related producer in a third country as a result of the imposition of preliminary or definitive anti-dumping duties or the initiation of an investigation against the exporter in the first country. This is not recognised as circumvention by any other country. Read more here...Safeguards and trade remedies in the SADC and ESA Economic Partnership Agreements
New working paper: Safeguards and trade remedies in the SADC and ESA Economic Partnership Agreements by Prof. Gerhard Erasmus, a tralac Associate. This paper discusses the “Trade Defence Instruments” in the Economic Partnership Agreements (EPAs) currently being negotiated between the European Union (EU), on the one hand, and different configurations of ACP (African, Caribbean and Pacific) countries on the other. These “instruments” cover remedies against unfair trade practices (anti-dumping and countervailing measures) as well as safeguards. ACP concerns about infant industry protection, food security and agriculture are also on the agenda. Read more here...Sino-African agricultural cooperation: Lessons for Africa’s agricultural development
New working paper: Sino-African agricultural cooperation: Lessons for Africa’s agricultural development by Ron Sandrey and Hannah Edinger. As part of the Forum on China-Africa Cooperation process, China has identified agricultural cooperation with Africa as a key priority sector of interaction. This cooperation with the continent has been ongoing and spans over the last five decades. Since the 1990s greater impetus has been placed on this relationship. Rich in agricultural resources, this support both financially and technically should be embraced and best harnessed by the continent to “feed itself”, given the issues of African food security and rural poverty, which came to the forefront once again during the big food price increases of 2008. Read more here...
AGOA.info
July trade data published
Trade data under AGOA was updated a few days ago to include August 2009 data. As a result of major declines in the value of exports from the largest traders Nigeria and Angola (-65% and -60% respectively), aggregate AGOA exports are down 61%. Although each of the leading exporting countries under AGOA have seen a contraction in their US-bound exports this year, there are some notable examples within the Southern African and East African region where this is not the case. Lesotho (-4%), Kenya (-4%) and Swaziland's exports (-1%) have remained relatively stable for the year to August, while Malawi has recorded a 118% increase thus far to US$ 45mn.
Updated bilateral US-Africa country trade profiles
Profiles of disaggregated bilateral US-Africa trade, by country, has been updated to reflect July 2009 data. This also includes various regional profiles - SACU, BLNS, COMESA, ECOWAS, and CEMAC. Follow this link.
Other updated AGOA data sections include disaggregated bilateral trade profiles for each AGOA country individually (as well as within various regional configurations), aggregate bilateral trade, preferential trade under AGOA / GSP and sectoral data from AGOA-eligible countries by value and as a proportion of US imports, as well as sectoral new AGOA and GSP AGOA data. Textile data, is available by value and by volume. Data to August 2009 shows exports of clothing are down 12% year-on-year (clothing exports made from third country fabrics are 9% lower in the current year). Export data is available at this link.
The most recent quota period commenced in October 2008 and lasted up until September 2009. Quota utilisation for the full year was 15.7%, and 30.5% under the LDC sub-quota (applicable to the use of third country fabrics). Follow the link to the data here.
Trade acronyms and terminology
Visit AGOA.info's alphabetically-ordered database of trade-related acronyms and terminology
Latest AGOA news
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- Read these and other AGOA-related news articles in AGOA.info's news area, which is continuously updated with articles sourced from a wide range of African and foreign publications.
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