Business Unity South Africa (BUSA) CEO Nomaxabiso Majokweni accepted an invitation from the Portfolio Committee on Trade and Industry to brief Members on business' perspective of SA's trade agreements and trade relations at Parliament on 1 August. The roundtable meeting was attended by representatives of the DTI as well as trade law specialists.
BUSA made the following key points to Parliament:
Looking to the future, multilateral free trade agreements - such as those negotiated at the World Trade Organisation - are not necessarily the best route for South Africa. Rather, today countries are focusing more on regional and bilateral trade agreements to build stronger trade relations. BUSA believes that Africa should be at the heart of SA's South-South trade cooperation.
The removal of non-tariff barriers (NTBs) to trade should receive as much attention as tariff reductions do in promoting trade. To support this argument, BUSA pointed to a World Bank study which showed that NTBs negatively affect up to US$3.3billion worth of trade within SADC alone.
NTBs are restrictions on trade that are not linked to tariffs. They include import quotas, special licenses, unreasonable standards for the quality of goods, bureaucratic delays at customs, export restrictions, etc.
The New Issues
BUSA urged government to give added consideration to new factors influencing international trade such as global value chains and trade and in services.
Companies are no longer producing their products in isolation but are sourcing components from around the world at the most competitive prices. This has resulted in the creation of global value chains, regarding which BUSA suggested that government needs to take a proactive and strategic approach.
So, too, with the global trade in services - BUSA recommended that government adopt a more scientific approach, taking into consideration research and statistics in order to better understand SA's interests in this sector.
Overall, BUSA called for better coordination and cooperation among departments and government agencies, and for the continued strengthening of the NEDLAC process and interaction with Parliament. Business continues to build its own capacity (internally and regionally) to participate in trade policy debates.
Lee Padayachee is the Parliamentary Liaison for Business Unity SA (BUSA).