SA, China eye increased trade
1 October 2004
South Africa may seal a free trade agreement with the People's Republic of China before it signs on the dotted line with the United States.
Free trade talks between the Southern African Customs Union (Sacu) and the US have run into substantial difficulties - with both parties agreeing to time out to clarify their positions.
Commenting on the stalled talks, the Department of Trade and Industry said - somewhat enigmatically - that it would, in the meantime, be looking to greener pastures.
And so it appears to be. The SACU is in the process of kick-starting free trade negotiations with China, one of the fastest growing economies in the world.
South Africa is already China's biggest trading partner in Africa, accounting for 20% of the total trade volume between the Asian giant and the African continent.
Deputy President Jacob Zuma and Agriculture Minister Thoko Didiza recently met with Chinese officials, and Chinese
Vice-President Zeng Qinghong visited President Thabo Mbeki in South Africa.
Didiza's China visit - aimed at strengthening political and economic relations between the two countries - resulted in a tit for tat memorandum of understanding that lifted bans on a number of Chinese and South African agricultural products.
These include Chinese poultry, meat and pork, and animal products from South African foot-and-mouth disease free areas.
China has also agreed to accelerate its risk analysis on importing South African table grapes, while South Africa will, in turn, accelerate its risk analysis on importing Chinese apples and pears.
In July, following the visit to South Africa by Zeng, and after South Africa formally recognised China's market economy status, the two countries agreed to launch Free Trade Agreement negotiations,
A joint communiqué said: "The two countries agreed to encourage and support mutual trade and investment and to expand co-operation
in areas of mutual economic interest."
By establishing common principles and standards to negotiate the rules that govern trade, the market economy status is expected to ease the process of linking the two economies.
During the meeting with Mbeki, Zeng said South Africa was "a key African partner of China", adding that China was willing to forge a strategic partnership with South Africa to seek equal and mutual benefits and common development.
Economic and trade relations between South Africa and China have grown rapidly since the formal establishment of diplomatic relations.
Bilateral trade increased from US$1.47-billion in 1990 to more than US$3.7-billion in 2003. Two-way trade in the first quarter this year amounted to US$1.67-billion, an increase of 66.6% from the same period last year.
Currently, China imports iron ore, copper, chrome, timber and paper pulp from South Africa. Chinese imports include high value-added products such as
appliances.
SouthAfrica.info reporter
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