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Davies: SA will use Brics to counter impact of trade wars

Jul 25 2018 14:45
Sibongile Khumalo

South Africa plans to use the Brics platform to find ways to mitigate the impact of growing protectionism, as the country has become collateral damage in the ongoing US trade wars, Minister of Trade and Industry Rob Davies has said.

Speaking on the sidelines of the 10th Brics Summit, which started in Johannesburg on Wednesday, Davies said the business forum established by the five-nation emerging economies would be used to encourage trade among member states and finds ways to promote multilateral trade.

"All of us in Brics agree that we are in a phase in the global economy characterised by unilateralism and discriminatory tariffs that have led to retaliatory fees," said Davies.

"Many of us have been affected by measures that have been taken by the US to impose tariffs on steel and aluminium products," he said. 

In March, the US announced new tariffs on steel and aluminium imports, which the government said would impact local business, although SA steel and aluminium products account for less than 2% of US imports.

Davies lamented that the tariffs were imposed despite engagements by the South African government.

"South Africa is not a major protagonist, but we are hit by collateral damage," he said.

He said the country's approach was to protect the steel industry, which employs approximately 7 500 people.

However, US tariffs do not mean all of the jobs are at risk, according to Davies. 

He said a similar tariff system was now being considered for imports of cars from South Africa, which he said currently benefited from the African Growth and Opportunity Act (AGOA) trade agreement, which provides duty-free market access to the US.

South Africa’s auto imports make up 0.4% of the US market.

The economic ramifications of trade wars between the US and China are expected to dominate the three-day summit, as US President Donald Trump threatens to broaden the list of tariffs in Chinese imports.

Davies said the Brics Business Forum, established in 2013 to facilitate trade between member states, would be used to encourage complementary trade. It would counter the economic effects of protectionism - where a country's domestic industries are insulated against foreign competition by taxing imports - by powerful economies, and seize the opportunities created by the digital economy, he explained.

"The objective of Brics is to address imbalances created by strong economies and shift away from unilateralism to multilateralism," he said.

On Tuesday, China committed $4.7bn in trade to South Africa during the state visit by President Xi Jinping.

Davies said infrastructure development and the manufacturing sector were the top industries that would benefit from the investment.

President Cyril Ramaphosa is due to address the summit, which is attended by leaders of members states.

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dti  |  brics2018  |  rob davies  |  trade wars  |  brics summit


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