1. 1 Key issues emerging from the Trade Workshop held on 1 August 2013 Presentation to the Portfolio Committee on Trade and Industry – 10 October 2013 Ms Margot Herling – Content Adviser

2. Key areas covered Agricultural trade Trade policy Regional integration Trade relations – US and EU New generation issues 2

3. Agricultural trade Agricultural sector’s contribution to employment opportunities +/- 70% agricultural products = intermediary products Relatively low support to farmers compared with other countries Usually trade surplus in agricultural goods, tendency towards trade deficit Agricultural sector highly liberalised Agriculture vs manufactured goods at negotiations Unintended consequences, as cost of packaging of exported agricultural goods ≤ 30% cost of agricultural exports 3

4. Agricultural trade (cont) Although agricultural goods are liberalised in terms of tariffs, the sector faces protectionism Protectionism = non-tariff measures (unscientifically- based sanitary and phyto-sanitary standards (SPS), regulation) + other forms of red tape Complex domestic food control regulatory environment (many players – DAFF, DoH, DTI; many regulations) WTO-compliant support is lacking 4

5. Trade policy Organised business largely support Trade Policy and Strategic Framework Overemphasis on tariffs with little focus on other trade policy tools Impact and interplay of the existing trade agreements and those being negotiated on South African exports? New trade issues: climate-related trade measures, private standards, unfair global value chain practices and internal market structures affecting competition Slow implementation of new trade agreements (SACU- MERCOSUR Benefit from shifts in trade and global value chains: technology transfer, skilled labour and efficient and affordable services 5

6. Regional integration Address non-tariff barriers (to lower cost of trade and increase the ease of trade) and rules of origin (to avoid trade deflection) Mainly affect SMMEs and small-scale traders who contribute between 30 – 60% of regional trade volumes Enforcement of rules-based regional agreements Establishment of regional bodies Lack of regional policy alignment between member states 6

7. Trade relations: US (AGOA) Balanced trade with the United States Increased exports of advanced manufacturing products to the United States Threats:  AGOA being terminated OR  Extended without South Africa 7

8. Trade relations: EU EU’s largest market in Africa Trade balance = negative Exports to EU: mining products and whole vehicles and automotive components (Germany) Threats:  EU’s agricultural subsidies  EU’s SPS measures 8

9. New generation issues Investment:  Termination of Bilateral Investment Treaties (BITs)  Protection of outward FDI  Status of BITs in Africa (high risk countries) Services:  Services sector should receive more attention  Support manufacturing activity  Accessibility and cost Competition:  Unfair competition practices can nullify/impair gains  Example: private standards 9

10. 10 Thank you