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U.S mid-terms: SA not throwing in the 'waslap' in trade discussions - Davies

Nov 07 2018 16:33
Khulekani Magubane and Lameez Omarjee, Fin24

Minister of Trade and Industry Rob Davies said South Africa would not throw in the "waslap" in its ongoing discussions with the United States for fairer tariffs on local exports and that the department is at an advanced stage of discussions with US Secretary of Commerce Wilbur Ross about this. It would continue to engage with the newly-elected Congress.

Davies was replying to questions from Members of Parliament in the National Assembly on Wednesday afternoon. The original question came from African National Congress MP Bhekizizwe Radebe, who asked about the impact of the so-called trade war between the U.S and China.

U.S President Donald Trump’s inward looking approach to the trade regime of the world’s largest economy has left steel and aluminium exporters sending products to that country reeling for much of this year.

In his first response Davies said the impact of the new trade environment globally was profound, including the fact that at least 7000 jobs were at stake in aluminium and steel firms as a result.

"There is no doubt that we have entered a new era in trade. One feature of this is the so-called tariff wars. While we are not a protagonist, we have been affected as collateral damage," said Davies.

Davies reminded members that SA got a partial exemption of 36 steel tariff lines and that the US government has committed to listen to SA’s representations. The IMF calculate that the tariff war contributed to 0.2% downgrade in the global economy forecast, Davies said.

In asking his supplementary question, Radebe said China is SA’s largest sole trade partner. He asked whether or not it was time to “stop depending on the goodwill of U.S investors and go straight to congress and ask the US government for protection”.

Davies said the Department of Trade and Industry was already in focused discussions with Secretary Ross about the impact of the past tariff decisions and that the South African government was sure to get a receptive ear on that level.

"It is our continuous endeavour to enlarge our position and export more products. I have been interacting with Secretary of Commerce Wilbur Ross and Congress will be part of our work in seeking a better trade arrangement going forward," said Davies.

In his supplementary question Economic Freedom Fighter MP Mbuyiseni Ndlozi cited the book by acclaimed economist Ha-Joon Chang Kicking Away the Ladder. He asked why SA did not move to protect "infant industries" the way developed economies did.

"The economies we are engaging with did not do what we have been told to do to develop their economies. They protected their infant industries. Can we at least protect our waslaps (facecloths)? If we can’t protect those, then how can we hope to protect our waskams (hair combs)?" Ndlozi asked.

Davies replied, "The member is correct. That is why we continue to fight against new trade rules that do not serve our interests. We need to fight to ensure that that space is created in increasingly difficult economic circumstances".

Davies told members that South Africa’s fundamental objective was to strengthen regional integration in Africa. One third of SA exports go to the African continent and two thirds of those are finished products, Davies said.

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