5 April 2019

South Africa: Trade Agreement Bolsters SA Exports Into Brazil

Photo: allafrica.com
Johannesburg, South Africa, top and Rio de Janeiro, Brazil, bottom

The preferential trade agreement between the Southern African Customs Unions (SACU) and the Southern Common Market (Mercosur) trade blocs has led to a steady increase of South African exports into Brazil.

This is according to the South African Foreign Economic Representative in Brazil, Shanaaz Ebrahim.

Speaking at the 12th Latin American Defence and Security Exhibition (LAAD) currently underway in Brazil, Ebrahim said that South African exports to Brazil for the year 2016/17 rose to $43 million, and 2017/18 they further increased to $183 million.

South Africa is one of the member countries of the SACU.

"According to trade statistics, our trade deficit with Brazil has shrunk considerably in 2018. The deficit is now at $700 million down from $1.2 billion in 2017. This is thanks to the fact that we have increased our exports to Brazil by 37% from $483 million in 2017 to $663 million in 2018.

"Part of this was due to the ratification of the SACU/MERCOSUR preferential trade agreement which was ratified in April 2016 where SACU had offered MERCOSUR tariff line items of about 1065 product lines across 16 sectors of which 469 products are zero percent import duty free," she said on Thursday.

Mercosur reciprocated this agreement by offering SACU 1052 product lines of which 778 products were at 0% import duty free.

"This offers us a window of opportunity to penetrate the Brazilian market through these zero percent import duty free products. Negotiations of this agreement started in 2000," said Ebrahim.

Ebrahim's comments come as a delegation of South African companies are participating in the LAAD through the Department of Trade and Industry's (dti) Export Market Investment Assistance Scheme (EMIA).

The scheme aims to increase exports of South African manufactured products.

The dti is hosting a pavilion at the fair where 21 companies are showcasing South Africa's industrial capabilities with the eventual intention of securing trade leads and business opportunities.

The purpose of the agreement is to integrate the economies of member countries through gradual and reciprocal liberalisation of trade and the strengthening of economic co-operation ties among member countries.

South African exports to Brazil for the year 2016/17 rose to $43 million, and 2017/18 they further increased to $183 million.

"This offers us a window of opportunity to penetrate the Brazilian market through these zero percent import duty free products. Negotiations of this agreement started in 2000," she said.

Both South Africa's and Brazil's membership to the BRICS multinational agreements was advantageous to both countries.

"This year Brazil will be chairing the 11th BRICS Summit which will be held in November, so there is going to be a series of working groups and meetings during the course of this year and we are looking forward to those agreements," Ebrahim said.

She urged South African companies to familiarise themselves with the Brazilian market.

"I would also urge our companies to interrogate and familiarise themselves with the list of 0% import duty free products as that will orientate them on the viability of their products within the Brazilian market and it would also stand them in best position to draw instant benefits resulting from the SACU/MERCOSUR preferential trade agreement."

LAAD is a leading Latin America and Security event that gathers international and national companies that provides technologies, equipment and services for armed forces, special forces, police, homeland security and security managers from large companies, service concessionaires and critical infrastructure.

Meanwhile, Chief Executive Officer of black women-owned Floida Engineering Services (FES), Florence Musengi said the exhibition platform falls in line with her company's strategic objectives of securing partnership opportunities in Brazil and the rest of the Mercosur trade bloc.

Floida Engineering Services is showcasing its flagship Short-Range Surveillance Radar system (SRSR) at the LAAD exhibition in Rio de Janeiro, Brazil.

The company, which was established in 2015, is a multi-disciplinary engineering services company geared towards the provision of innovative solutions for the aerospace and defence industries.

"We were proud to showcase the development progress of our flagship product at LAAD since it was only in the concept stages when we here two years ago. The Latin American defence market is robust; the technology and operational requirements are typically advanced, so acquiring a customer in this market is critical," said Musengi.

LAAD which started in the capital of Rio de Janeiro on Tuesday concludes on Friday.

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