Cutting through the Red tape
1 October, 2004
It may be that South Africa seals 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 will, in the meantime, be looking to greener pastures.
And so it appears to be. 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.
Recently both Deputy President Jacob Zuma and Agriculture Minister Thoko Didiza met with Chinese officials, and Chinese Vice-President Zeng Qinghong visited President Thabo Mbeki in South Africa.
Didiza's stay in China - aimed at strengthening political and economic relations between the two countries - resulted in a tit for tat memorandum of understanding that lifts 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 the importation of South African table grapes, while South Africa will, in turn, accelerate its risk analysis on the importation of Chinese apples and pears.
In July, following the visit to South Africa by Zeng, China and South Africa agreed to launch Free Trade Agreement negotiations, after South Africa formally
recognized China's market economy status.
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 is "a key African partner of China". He said China is 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 has 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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