Imbalanced playing field trips up SA's trade ambitions, Parliament hears

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  • Deputy director-general Xavier Carim said South Africa continues to support the World Trade Organisation.
  • However, he said the organisation's rules "exhibit a range of imbalances that prejudice developing economies".
  • Carim said the WTO had several vacancies in key divisions and that these have "disabled dispute mechanisms".

The Department of Trade and Industry blamed capacity challenges at the World Trade Organisation and "imbalanced" international trade law enforcement for a range of consistent challenges South Africa continues to experience with major trade partners.

The department briefed Parliament's Portfolio Committee on Trade Industry and Economic Development on Tuesday morning, providing MPs with an update on the state of trade between South Africa and other regions of the world.

Front and centre are the challenges South Africa has experienced with the US, which imposed a 25% duty on steel imports and a 10% duty on aluminium imports from South Africa in 2018 as the world's largest economy entered into a trade war with China.

As South Africa continues coming to grips with the dumping of cheap imports such as poultry from other markets, government has also highlighted the importance of intra-Africa trade and support for local manufacturers.

Deputy director-general for international trade and economic development Xavier Carim said South Africa continues to support the WTO, but said the department recognised that the organisation's rules "exhibit a range of imbalances that prejudice developing economies".

"In agriculture, rules continue to allow developed countries that don't have comparative obstacles to provide massive government advantages to their farmers, and that undermines trade," said Carim.

Carim said the WTO also had several vacancies in key divisions and that these have "disabled dispute mechanisms" and, as a result, a key component of the fair trade environment was lost.

"Steel and aluminium tariffs were some of the undertakings the US took. In the context of a disabled dispute settlement mechanism, this action becomes riskier. There have been no direct challenges to the US through the WTO on this matter," Carim said.

One of the consequences of this, Carim said, was that direct trade arrangements between specific member states of the WTO have occurred which serves to undermine another critical principle of the WTO.

He said South Africa has worked with India through the Trade-related aspects of Intellectual Property Rights to facilitate the transfer of pharmaceutical technology to diversify the production of vaccines during the global Covid-19 pandemic.

He said there was still more work to be done to expose the continent to new markets and Africa's share of world trade is low at approximately 3%.

"This speaks to the importance of growing intra-Africa trade. Twenty-two African countries count other African countries as their main trade partner[s]. Another five see [intra-African trade] as the second most important. Most of this trade is within established trading blocs," he said.

He said South Africa currently accounts for 22.4% of all intra-Africa trade, with a quarter of its global exports going to other African countries between 2018 and 2020. To deepen this, he said, the African Continental Free Trade Area Agreement has been signed by 54 of 55 African Union members.

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