where we emphasise and look at patterns of trade and try to promote greater structural equity in that pattern of trade.
“For example, this is a discussion we have been having bilaterally with China about the fact that our exports to them are dominated by primary products and that our imports are dominated by value-added products.”
Davies says that two important commitments
were part of the comprehensive strategic partnership agreement signed in China during President Jacob Zuma’s visit in 2010. “China undertook to investigate and go forward with projects that would beneficiate mineral products at the source. The second thing is that we have agreed – and we have an agreement from China – that they will co-operate with us to try to increase the proportion and the value of value-added products that we sell to China. We have given them a list of 10 value-added products that we can supply. I have told our team that we need to set ourselves a target to get two of those in our top 10 exports to China.” Wine, auto components, chemical products and machinery are among the value-added products being targeted.
Davies adds, “We secured an agreement
from China last year that they would support us in facilitating a trade exhibition which was dedicated to those value-added products. We held that trade exhibition in November last year in Beijing and Shanghai. It was a success – a number of contracts were entered into then and a number of follow-ups still have to be made.”
It is not all rosy, however. “One of the important discussions that we have had with Brasil that we will be taking forward is on technical barriers to trade issues. We call it ‘wine for swine’ where there are technical barriers on the entry of South African wine into Brasil and then there are barriers on the entry of pork. Through our relationship and the good understanding that we have, we have agreed on a process to deal with that.”
Davies says that outside of BRICS, bilateral
relations in groupings such as IBSA (India, Brasil, South Africa) are important. “We have extremely valuable bilateral co-operation arrangements. They range from important learnings that we have had from Brasil around industrial policy to learnings that we have had from both India and Brasil around small business development.”
South Africa is also exploring strengthening economic relations with other emerging economies such as Turkey, Saudia Arabia, United Arab Emirates and Oman. “We also want to put some effort into ASEAN countries. We are starting a very warm relationship with Indonesia now. That is where the opportunities are. That is where we need to focus our attention. That does not mean that everything else is not important. Those are our priorities and they correspond with the way the world economy is shaping up and the way we need to reposition ourselves.”
Davies urged the business community to grasp these new opportunities. “South African companies need to understand that the world is undergoing tremendous and very important change and that we have historic opportunities to build new patterns of trade and investment relations. We must seize those opportunities We must not be caught just lamenting the lack of opportunities or the declining range of opportunities in our established relations. We need to understand the big fundamental forces that are at work in the world economy and we need to try to position ourselves accordingly.”
On assistance for companies, Davies says, “The kind of trade delegations that we take are particularly focused on dynamic emerging economies. Those would tend to lean towards BRICS and other fast-growing emerging economies. For emerging exporters in particular we offer a whole range of advice services. We also offer support for travel, exhibitions, and that sort of thing. There are facilities available in the DTI.”
May 2012 | Management Today 15
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