South Africa’s Economic Diplomacy: Briefing by the Institute for Global Dialogue

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International Relations

16 February 2022
Chairperson: Mr S Mahumapelo (ANC)
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Meeting Summary

The Institute for Global Dialogue presented some of the work it had been doing on South African foreign policy in the context of foreign economic relations and the objectives that align with the way South Africa considered its international relations.

At the end of the 1990s with the end of the Cold War, there was activity around the market being the key actor in the mainstream optics of foreign economic relations. It had to be about attracting foreign direct investment. Direct investment would create a multiplier effect in the economy, creating opportunities for employment and growth (trickledown effect to development). In the South African context, it had to align with what our domestic economic priorities were.

South Africa had largely aligned foreign economic policy to a mainstream interpretation of the global economic approach. South Africas exports have lagged behind the rest of the world over recent decades, and this has likely constrained overall economic growth. South Africas main imports were machinery (23.5 percent of total imports), mineral products (15.1 percent), vehicles and aircraft vessels (10 percent), chemicals (10.9 percent), equipment components (8.1 percent) and iron and steel products (5.3 percent). South Africa mostly exported mineral products (25.1 percent of total exports, including chrome, manganese, vanadium, vermiculite, ilmenite, palladium, rutile and zirconium, crude and coal), precious metals (16.7 percent, mainly gold, platinum, diamonds and jewellery), vehicles and aircraft vessels (11.9 percent), iron and steel products (11.9 percent), machinery (8.1 percent), chemicals (6.1 percent) and vegetables (5.4 percent).

To address the inherent bias against exporting, South Africa urgently needed to address the high costs of investment and trading across borders; review the impact of existing industrial, localisation and sector-specific policies on export behaviour; implement a comprehensive and well-targeted export promotion and export finance framework, and update its trade policy approach to negotiations across the continent and internationally.

Members said the presentation was enlightening, informative and empowering. Members wanted to know what the dominant economic model was in South Africa? One member asked:Were we leaning towards capitalism or the socialist democracy economic model?” How important were southern hemisphere regional economic powers to South Africas economic trajectory? Did the financialisation of the economies of the world have an impact on hardcore economic activities like manufacturing, minerals and commodity beneficiation, localisation and trade? What were the capabilities required in both the Department of Trade Industry and Competition and the Department of International Relations and Cooperation to engage with this complex relationship?

The view of the Members was that their oversight was not merely limited to DIRCO. The objective was not to be conclusive on any matter. The objective is, was and would continue to be the sharing of information and the necessary interpenetration of ideas so that we are able to objectively influence one another”.

Meeting report

The Institute for Global Dialogue presented some of the work it had been doing on South African foreign policy in the context of foreign economic relations and the objectives that align with the way South Africa considered its international relations.

At the end of the 1990s with the end of the Cold War, there was activity around the market being the key actor in the mainstream optics of foreign economic relations. It had to be about attracting foreign direct investment. Direct investment would create a multiplier effect in the economy, creating opportunities for employment and growth (trickledown effect to development). In the South African context, it had to align with what our domestic economic priorities were.

South Africa had largely aligned foreign economic policy to a mainstream interpretation of the global economic approach. South Africas exports have lagged behind the rest of the world over recent decades, and this has likely constrained overall economic growth. South Africas main imports were machinery (23.5 percent of total imports), mineral products (15.1 percent), vehicles and aircraft vessels (10 percent), chemicals (10.9 percent), equipment components (8.1 percent) and iron and steel products (5.3 percent). South Africa mostly exported mineral products (25.1 percent of total exports, including chrome, manganese, vanadium, vermiculite, ilmenite, palladium, rutile and zirconium, crude and coal), precious metals (16.7 percent, mainly gold, platinum, diamonds and jewellery), vehicles and aircraft vessels (11.9 percent), iron and steel products (11.9 percent), machinery (8.1 percent), chemicals (6.1 percent) and vegetables (5.4 percent).

To address the inherent bias against exporting, South Africa urgently needed to address the high costs of investment and trading across borders; review the impact of existing industrial, localisation and sector-specific policies on export behaviour; implement a comprehensive and well-targeted export promotion and export finance framework, and update its trade policy approach to negotiations across the continent and internationally.

Members said the presentation was enlightening, informative and empowering. Members wanted to know what the dominant economic model was in South Africa? One member asked:Were we leaning towards capitalism or the socialist democracy economic model?” How important were southern hemisphere regional economic powers to South Africas economic trajectory? Did the financialisation of the economies of the world have an impact on hardcore economic activities like manufacturing, minerals and commodity beneficiation, localisation and trade? What were the capabilities required in both the Department of Trade Industry and Competition and the Department of International Relations and Cooperation to engage with this complex relationship?

The view of the Members was that their oversight was not merely limited to DIRCO. The objective was not to be conclusive on any matter. The objective is, was and would continue to be the sharing of information and the necessary interpenetration of ideas so that we are able to objectively influence one another”.

Meeting Report
The Chairperson welcomed all to the meeting. The Committee would be dealing with one item which was an interaction with South Africans who worked in the international relations environment, the Institute for Global Dialogue (IGD). The Committee decided that the IGD would be invited to return at a later stage because Members wanted to comprehensively engage with the information/data/material and any additions IGD would provide it. The Committee agreed that there was a responsibility to ensure that future generations did not suffer from the effects of apartheid and colonialism. Future generations should not inherit what we have been witnessing happening in Randfontein at Hoërskool [Jan] Viljoen”. Part of the nuanced approaches by the Committee was both qualitative and quantitative policy evolution review and implementation.

A brief introduction covering the qualifications and experiences of the presenters would be done. The presentation would then commence with Ms Sanusha Naidu, Senior Research Fellow, IGD, and Dr Philani Mthembu, Executive Director: IGD.

Brief Introduction: Qualifications and Experience
Dr Mthembu was Executive Director at the Institute for Global Dialogue, an independent foreign policy think tank based in Tshwane (Pretoria), South Africa. Before joining the IGD, he pursued a joint doctoral programme with the Graduate School of Global Politics, Freie Universität Berlin (Germany), and the School of International Studies at Renmin University, Beijing (China). He co-founded the Berlin Forum on Global Politics (BFoGP), a non-profit organisation dedicated to the promotion of academic, expert and public understanding of global politics. His recent publications include a single-authored book titled "China and India's Development Cooperation in Africa: The Rise of Southern Powers".

Ms Naidu was a foreign policy analyst. Her research interests include democratisation in Africa; Africas political economy and development; Africas relations with emerging powers from the Global South (BRICS and IBSA); South African foreign policy analysis; and the role of track two diplomacy in international relations.

Ms Naidu has a Masters degree in International Relations from the University of Staffordshire, United Kingdom. She has previously worked at the Centre for Conflict Resolution based in Cape Town and managed the South African Foreign Policy Initiative (SAFPI) at the Open Society Foundation for South Africa. She has an extensive publications record which includes two edited volumes on Africa-China relations. She is a regular media commentator on national and international issues for major news agencies. She is also a regular analyst on South Africa's domestic politics and electoral trends.

Chairperson Introductory Remarks
It was important for the Members to always remind themselves and the rest of humanity, particularly South Africans, that we are a [constitutional] democracy in South Africa". The expectation was for there to be transparency and accountability, and Members must open themselves up for advice or criticism. Members of Parliament must have the tenacity to withstand whichever pressures that come from whichever quarters. It was also important for Members not to be some kind of an island”. At the centre of operations in Parliament were the masses of people. These people were organised in their organisations and institutions and also participated in the democracy.

The Committee deemed it fit to interact with the experts today to enable the interpenetration of ideas. This would enable the presenters to observe the work of the Committee and have the Committee interact with them. This was an opportunity for the presenters to advise the Committee and for the Committee to decide whether it would take the advice or not.

We are a people-centred democracy. South Africas democracy without the participation of citizens would not be a full democracy. The democracy was within the context of the countrys past. South Africa came from a period of apartheid and colonialism. There was a responsibility to ensure that future generations do not suffer from the effects of apartheid and colonialism. This was the responsibility of the blacks, the Africans, the Indians, the coloureds and white people because all of them are South Africans," because the Freedom Charter said the country belonged to all who lived in. It was therefore incumbent on all to make sure that difficulties that needed to be confronted were not hidden. This was important to ensure that future generations inherited a better South Africa.

Future generations should not inherit what we have been witnessing happening in Randfontein at Hoërskool [Jan] Viljoen". Future generations needed to know that the level at which one should interact was with a level of us being part of humanity” without prejudices. It was important for Members to understand that when they did their jobs it was also being done within the international environment. Members needed to analyse, understand, be able to see how South Africa was influencing the global balance of forces and whether in the process the country was sustaining its policy or not and at the same time learning lessons.

The evolution, consolidation and sustainability of the policy process in South Africa could only happen when the Committee allowed individuals and institutions to interact with the Committee. As experts, the Institute for Global Dialogue (IGD) could suggest to the Committee areas where policy needed to be initiated, including areas where oversight needed to be strengthened. The Committee had nuanced its approach with a philosophy incapsulated in the context of reciprocation. What this meant amongst other things was that what we do we must work with others and what others do with us we must also receive”. The knowledge received from others must be imparted to other people for them to learn from the Committee.

At no stage would the Committee ever think that it was the beginning and the end of the understanding of matters related to international relations. Institutions and organisations invited to the Committee had the freedom to put forward suggestions to the Committee on what courses Members should take in their studies in the short, medium or long term. Studies were there to strengthen the intellectual capacity of Members to interact with the international relations environment. Such a proposal would be welcomed.

Part of the nuance approaches by the Committee was both qualitative and quantitative policy evolution review and implementation. A policy-quantitative approach was taken because the Committee did not think that it would help much if it theorised at all times. The theory needed to be converted into practice to enable the Committee to do the necessary quantification of the implementation of those theories. Quantification needed to be done for the Committee to change the environment and have an impact on the environment in a manner that helps achieve the strategic goal.

For example, trade between South Africa and China was estimated around $10 billion. When Members present in Parliament the aforementioned figure would sound very good and seems as if trade between China and South Africa was very good, forever increasing and as a consequence of that impacting on the growth of the South African economy and hopefully translating into dealing with unemployment, inequality and poverty. If we say that $10 billion was being traded between South Africa and China, we must not end there. The view of the Committee was that the preamble of the Constitution needed to be located to find a sentence that read that the injustices of the past needed to be dealt with. One of the injustices of South Africas past was economic injustice. Therefore if we continue with trade with countries like China, we should be able to quantify the impact we are making through such trade to deal with the economic injustices of the past. In the $10 billion trade between South Africa and China, one would have to acknowledge that white people had more economic privileges than black people. It had to be determined whether the $10 billion was content-wise an implementation and impact-wise helping to deal with the injustices of our past which include economic realities of South Africa. This was so that future generations could see practically that continued trade with countries like China benefited black people. The likelihood was that a majority of white South Africans would benefit from the trade spoken about here of $10 billion.

The question was therefore how Members, at an international relations oversight level, would make sure that the concretisation of a non-racial South Africa results in the qualitative non-racialisation of the economy. If one does not do a "dipstick" test of the trade taking place and the Committee fails to perform oversight it would not be able to measure whether the trade and trade agreements help tilt the scales towards building a non-racial South Africa. This non-racial South Africa could not be built where things were not quantified. It was the belief of the Committee that it would help the Committee to quantify and to look at the qualitative nature as the Committee implements the agreements entered into. This would mean that institutions like the IGD would continue to work with the Committee and help with research and the review of policy. These institutions would also advise whether the Committee needed to adjust or re-adjust policy. These institutions could take it further by introducing something completely new for the Committee to take or consider. If the Committee decided to take the advice it would table it to Parliament for debate and adoption after having interacted with the Department of International Relations and Cooperation (DIRCO).

After the IGDs presentations, Members were allowed to interact with the presentation. IGD was welcomed to suggest in future to the Committee how it could overcome some of the subjective constraints within Parliament. It was the responsibility of the Committee to look at the entire spectrum of the Departments of South Africa and the extent to which those Departments interacted. This was important to ensure that South Africa not only made a name for itself in the global market but used those environments to its advantage.

The Committee needed to look across all the Departments and anything else internationally related which had been done. The Committee should not only be aware of internationally related matters but action needed to be taken from a perspective of oversight. The IGD could propose as to whether the Portfolio Committee on International Relations should continue to be structured the same way in which other Committees were structured. Did this structure help the Committee to perform effective, efficient and sustainable oversight on the Executive in its entirety? This critical question had to arise. The expectation was that the oversight of the Committee was limited to DIRCO. The view of the Chairperson was that their oversight was not merely limited to DIRCO. For example, since there were international people who were in the mining industry the Committee should be interested in the work that they do while working with the other relevant Committee. The Committee was happy to host the presenters. The presenters were there to improve the Committee's understanding and to empower the Committee in respect of the necessary tools needed to deal with matters of international relations. 

Presentation
Ms Naidu greeted everyone and thanked the Committee for having them. The Institute for Global Dialogue would present some of the work it had been doing on South African foreign policy in the context of foreign economic relations and the objectives that align with the way South Africa considered its international relations. The work that the IGD had been doing around South African foreign policy. There was a very important dynamic to South African foreign policy in respect of its value addition in international relations.

The project at the IGD called South Africa and the World” covered these issues mentioned by the Chairperson around quantifying both the qualitative and the quantitative impact of South Africas foreign policy. Since 1994 the focus had been on generating investment opportunities and improving confidence in South African markets. There were many markets, the formal market and informal markets. There was no one singular market. Markets had the ability to ventilate at the informal level and play a critical role in terms of how they also constitute income and generate investment.

The economic model of South Africa was structured around the linkages back into the domestic value demand and supply value chain. The export-led growth model. The Human Sciences Research had a project called the South African Corporate Expansion project. What was found in the project was that in 1990 South African corporates were very competitive in Africa because they had vestibule capital. These were mainly private sector corporates which were key in terms of competition in the African markets. The opening up of the Eastern European markets and the end of the Cold War meant that a lot of attention was directed to eastern European markets and Africa was not getting the same kind of attention. South African corporates were moving into the African market in retail, telecoms and the leisure and tourism industry. There was no formal policy that showed that South Africa had a particular formalised outward investment strategy.

The private sector was leading the charge in this regard but this was done based on how investors looked at what they wanted. Investors wanted to have markets at their disposal, security of interests and policy certainty. This was what South African corporates were doing outside of South Africa. Within South Africa, there was not the same competition. The market remained narrowly defined in terms of the big corporate sector players and competition was not happening in the way it was opening up to foreign investors or enabling the value chain to include other actors from within the state to compete. There were these kinds of dominant places and contexts where the objectives of what the foreign policy dynamics were in the post-1994 period were "how do we use the growth export level growth model as a developmental approach?" So we allow the investors to come into the South African market and create the kind of growth trajectory and the development would take place as a result of the trickle-down effect.

Then there was the question of growth through development. Do we have a very state-centric model that we control parts of the model but then the companies would need to have certain levels of being able to invest in the market and not just domestic players but international actors as well. South African policy in 1994 was trying to focus on the export-led growth market. At the end of the 1990s with the end of the Cold War, there was activity around the market being the key actor in the mainstream optics of foreign economic relations. It had to be about attracting foreign direct investment (FDI), FDI would create a multiplier effect in the economy creating opportunity for employment and growth (trickledown effect to development). In the South African context, it had to align with what our domestic economic priorities were. The bigger global structural question is whether the model of foreign economic engagements serves markets and hence the trickledown effect to development or should there be a more state-centric approach? This has been the debate since the introduction of Reagan and Thatcherite economics. So what we are essentially dealing with is what model works best.

Dr Mthembu said South Africa had largely aligned foreign economic policy to a mainstream interpretation of the global economic approach. South Africas exports have lagged behind the rest of the world over recent decades, and this has likely constrained overall economic growth. There were multiple reasons for this disappointing trade performance, including the structure of the countrys export basket (which remains dominated by commodity products), its dependence on a limited number of large but mature export markets, and the high cost and deteriorating competitiveness of the general business environment. South Africas manufacturing trade with the rest of Africa is considerably overstated but is evidence of the countrys important role as a logistics and services hub in the region. Trade and industrial policy also have an important role to play: effective rates of protection remain high in some sectors, the country adopts a cautious approach to trade agreements, and there is an increased focus on localisation. Together, these structural, environmental and policy factors increase the incentive to produce for the protected domestic market over exploring new export opportunities, while raising barriers for new entrants and lowering competition for incumbent firms. To address the inherent bias against exporting, South Africa urgently needed to address the high costs of investment and trading across borders; review the impact of existing industrial, localisation and sector-specific policies on export behaviour; implement a comprehensive and well-targeted export promotion and export finance framework; and update its trade policy approach to negotiations across the continent and internationally.

Discussion
Mr W Faber (DA) thanked the presenters for the presentation. More of these types of presentations needed to be had because it made it easier for Members to comprehend. It benefitted the Committee to go on some of these courses and receive more information from the subject matter experts. He asked whether both presentations could be sent to Members to read through in their own time. He wanted to see an expanded view on the topic of the “footprint”.

Mr T Mpanza (ANC) welcomed the presentation from IGD. The presentation was enlightening, informative and empowering. There was synergy between the Chairpersons opening remarks and what IGD had presented. He aligned himself with Mr Fabers statement that today was a lot to consume. Members should be given the presentation. When the time was suitable another slot should be arranged for IGD. This would ensure a meaningful engagement on the presentation.

A few things also needed to be raised. The economic models which dominate the world were the capitalist model and the socialist-democracy model. South Africa speaks about a mixed economic model. Was South Africa taking all of the aforementioned elements and putting them together or was there a dominant economic model? There were talks about white monopoly capital. Which model was predominant in South Africa? Were we leaning towards capitalism or the socialist democracy economic model? The concept of a mixed economy should be unpacked. A discussion needed to be had on the topic when IGD returned to the Committee.

The presenters importantly addressed the import-export relationship between South Africa and Africa. There seemed to have been a weak import-export relationship between South Africa and Africa. ECOWAS was a very powerful economic block in Western Africa and SADC. These blocks do not interact or interface economically in terms of trade. There seemed to be a silo mentality amongst African countries individually and also African regions. There was the African Continental Free Trade Agreement the assumption was that this would assist Africa because it would enable Africa to trade amongst itself as well as other continents as a solid one block”. The more continents and regions mobilised themselves the more powerful they would become. So that when they engage at trade-offs they come from a position of strength enabling them to bargain better with other formations like the EU.

The currency of the EU was very powerful. What would assist Africa to maximise the agreement most countries had signed so that economic interactions start happening amongst African countries and global regions enabling the continent to compete with strong global regions? 

On the issue of curriculums in tertiary education, Black Africans in particular attend tertiary institutions to study and secure employment. They do not have the mentality of going to study to contribute as entrepreneurs. The youth are not interested in learning artisan skills. TVET colleges are looked down upon. The youth were interested in attending universities where they flock to the humanities faculties” to complete a Bachelor of Arts degree. Very few go to University and join the economics faculty. How do we engage with our youth generation to redirect them? He seconded the proposal of Mr Faber for Members to receive the presentation for meaningful engagement and then arrange another slot for IGD to join the Committee.

Mr B Nkosi (ANC) thanked the presenters for their enlightening inputs.

Were there rigid structural continuities between South Africas diplomacy and that of Europe and the USA which were historic? How had these rigid structural continuities contributed towards the economic development of South Africa or lack thereof? Regional economic powers play a pivotal role in political and economic diplomacy but they are largely informed by economic aggregates of members of regional communities. To what extent was South Africas economic policy considerate of regional economic powers? To what extent was South Africa directing its trade relations either with these powers as a collective or with individual members and partners of these regional powers in the southand the “north”?

In respect of the south, imagine if developing economies largely dominated the post-region thatcher economics. There was no sense that the country prioritised economic ties and developments in these except to serve as bulwarks or counter-forces with established institutions at the multilateral level. How important were southern hemisphere regional economic powers to South Africas economic trajectory? South Africas economy had not diversified but was so embedded in the North Atlantic sphere of economic development.

The financialisation of the economy was complicated at the global level and South Africa tended to follow suit. This was why whatever happened in international markets affected South Africa quite directly. Did the financialisation of the economies of the world have an impact on hardcore economic activities like manufacturing, minerals and commodity beneficiation, localisation and trade? What do you think were the capabilities required in both the Department of Trade Industry and Competition and the Department of International Relations and Cooperation to engage with this complex relationship?

Response
Ms Naidu thanked the Members for their thought-provoking questions.

The questions required a nuanced approach to the way South Africas economic relations and questions around foreign policy were defined. When it came to the “footprint” of South Africas economic relations the contextualisation needed to be understood. It needed to be understood where South Africa was with Europe versus North America versus South America and Asia.

In the last slide, which spoke to how China was a big import-export actor for South Africa, there needed to be caution in terms of how much of the trade was based on a single commodity or sector. Often in the last two to three years from interpreting data the commodity boom mentioned by the Executive had been a big multiplier for the revenue entering the country. We have to be very cautious of commodity booms. Commodity booms peak and combust. If one does not take advantage of commodity booms when at their peak and does not using it to diversify the economy or invest in the structural economic reform of the economy, then you end up in a very precarious situation.

Look at Nigeria and Angola when the "oil booms" were at their peak. Look at the DRC right now where there was an incredible interest in cobalt. Cobalt was going to be a boom commodity in the next 25 years because it interacted with the microchip industry (semiconductor industry). The semiconductor industry was in a competitive state globally. The Chinese were dominant in the cobalt industry and large amounts of cobalt were being extracted from the DRC in its purest form. Export growth did not mean sustainability in the long term.

A country may end up in a situation where it becomes dependent on a single commodity or very primary commodities. If a country is dependent on primary commodities then this would not diversify the economy. South Africas economy was sophisticated in terms of structural spaces like our company structures and financial institutions.

When one talks about a mixed economic model one leans more towards the investmen-led model as opposed to finding that kind of commonality and the balance between the social-democratic process and how you translate your mixed economy into not just the trickled down effect but the creation of jobs.

This came back to the point made by Mr Mpanza about universities. Where were universities positioning themselves in the innovation, skills process in terms of education? Everyone wanted to go to university. There was the perception of what a university education gets you as opposed to a TVET qualification. This perception resulted in the imbalance of numbers between TVET colleges and universities. Universities needed to be much more aligned with what the diversification of the economy was.

How were we going to be that economy that invested in innovation, skills development and not just in particular sectors but in sectors across the board? This was where universities needed to become creative. The challenge was that universities had also played a very important role in respect of identifying how they would allocate cases at universities. One wanted universities to engage in research and development (RND). Chinas investment in RND had gone into $4 billion. This meant that China was investing in innovation and skills. China did not just want to be a global economic competitor in every industry and every sector in the global economy but they wanted to be the innovators in that sector.

On the question of South Africa, Africa and whether we were engaging with regional powers, one of the interesting things around South Africas relationship with the East African community as well as within the North African region was which countries South Africa engaged within those spaces. South Africas biggest competitor was Morocco in respect of Morocco becoming a transit corridor hub and an economic corridor hub for the southern European coast. Investments were going into Morocco because of its corridor economy and the fact that it linked up to those southern European places and those markets. South Africa needed to take advantage of the corridors on the side of the Indian ocean into Asia. There were landlocked countries there we just needed to look for the Durban port to be moved into that space and then South Africa would have a competitive advantage.

When it came to the question of whether South Africa was still in its infancy or not trading as much as it should with other African countries, this was true. South Africa was conducting a number of re-exports that spoke to the African Continental Free Trade Agreement. South Africa served as a transit port for goods that were coming from other countries into South Africa and then being re-exported. This was not a value addition for South Africa; it was not creating jobs or making markets or ports sustainable in the long term. The cost of waiting for goods to be loaded at offloaded at the Durban port was so costly that investors were now looking at other competitive ports in Africa on the east coast. These were challenges that needed to be considered for South Africa to determine how it would work with its partners in Africa. The African Continental Free Trade Agreement was still in its infancy; it had positive instruments and had been ratified. The real challenge for the Agreement would be conquering the barriers to trade in respect of movement of goods and people. A lot of the rules of origin of trade of goods would be caught up in negotiations around trade and non-trade barriers. When one looked at South Africas border posts and the cross-border movement of people, the e-visas were critical. Border posts were also needed on hand to understand the difference between persons trading between borders and persons moving across borders for other purposes.

Dr Mthembu said most of the questions asked had largely been covered but he would add a few points. There was a comment in question around expansion on the "footprint" data. The IGD would definitely do that to incorporate Europe and the Americas. Before the pandemic in Europe, the key export partners continued to be the likes of Germany, United Kingdom, Belgium, the Netherlands, Italy, Switzerland, Spain, France, USSR and Sweden. Those were some of South Africas top ten broader European trading partners.

When it came to Europe a lot of the trade had been facilitated by the Trade Development and Cooperation Agreement (TDCA) including the Economic Partnership Agreement which SADC and the EU signed in 2014. As part of those economic partnership agreements some of the key outcomes had been about geographical indicators in the EU but also the ability to have our names of origin like rooibos”, honey bush” and Karoo lamb” which had been increasing protected under the partnership agreement. The agreement had enabled more South African exports of food products and wines.

A key consideration had been around the African Growth and Opportunity Act. In the Americas, some of South Africas key partners had been countries like the United States, Brazil, Canada, Argentina, Mexico, Chile, Panama and Columbia. These were some of the areas that needed to be looked at in terms of diversifying South Africas trade partnership.

One of the Members raised a very critical point which was the legacy issue around the structure of the South African economy and its linkage to Europe and the United States, namely whether this linkage acted as a stumbling block in terms of diversifying South Africas economy into some of these other markets. There were definitely legacy issues in the economy over 70% of South Africas foreign direct investment came from European partners. Europe had a very strong footprint in South Africas economy. This was not necessarily a bad thing. Their presence should be kept in South Africa. It was however important to explore the opportunities of expanding “south-south” cooperation by entering non-traditional markets using the African Continental Free Trade and relations in Asia to expand and diversify the economy. The economy should not be left too comfortable having 70% of its foreign direct investment coming from a particular geographic region. The Continental Free Trade Area also needed to be optimised through trade facilitation, making sure that borders were efficient and products were not rotting on the borders before reaching markets. Sometimes it was faster and more efficient to bring in a container from China all the way to an African country than it was to move the very same container within the African continent. Those were some of the key areas that would help in terms of facilitating the trade with Africa but also in respect of identifying strategic partners within the continent to drive the Continental Free Trade area forward.

It was also important to utilise international partnerships with the EU, China, India and USSR to assist the continent to build regional value chains. A regional value chain strategy was needed for South Africa to integrate into its region. These were areas that would help South Africa diversify its economy, imports and exports.

Key barriers for African companies entering South Africa had revolved around issues of standards and phytosanitary standards. These were issues that could be worked on with African partners by assisting them to meet those standards they find difficult to meet. This would help both parties increase exports into the continent and imports from the continent which would not have to source from other regions. There were other areas that could be touched on in forthcoming engagements with the Committee. The IGD could also send the Committee key, insightful, recently completed reports regularly.

Closing Remarks 
The Chairperson said that Members had been responded to. The objective was not to be conclusive on any matter. The objective is, was and would continue to be the sharing of information and the necessary interpenetration of ideas so that we are able to objectively influence one another”.  Parliament as a legislature must allow itself to be influenced by external institutions and individuals.

The Committee was very happy with what it had received today. The session had been enriching. The Committee staff members would process the practical things like issues of workshops, seminars, short courses and long-term courses. This would be very important for the Committee to embark on those things. Technology could be used where there would be interactions based on seminars and workshops. Based on how you work as universities you can look at the work that we are doing through seminars and workshops for possible contribution to recognition of prior learning or accreditation processes for ourselves as Members of Parliament. The IGD was thanked for investing their time in presenting the presentation to the Committee. The Committee would communicate to the IGD when it would convene another session.

The Committee might also visit the institutes of the IGD to sit, have face-to-face discussions and brainstorming sessions. What could be considered was the institutionalisation of interactions between the Committee and IGD broadly. This would enable the Committee to go back to SONAs and the Minister's budget speeches and set out what and how the Committee intends to do certain things. This was something that could be looked at. The Committee would try to bring on board institutions of higher learning. This institutionalisation of interactions would help Parliament in terms of quality and international relations work. South Africans, journalists and analysts were invited to write to the Committee to continue the battle of ideas in as far as the arena of international relations was concerned.

The meeting was adjourned.

 

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