Date: 03/09/2004
Source: Ministry of Trade and Industry
Title: M Mpahlwa: SA-Brazil business seminar


OPENING REMARKS BY MINISTER OF TRADE AND INDUSTRY, MANDISI MPAHLWA ON SOUTH AFRICA-BRAZIL BUSINESS SEMINAR, 3 September 2004

President of South Africa, Mr Thabo Mbeki
Brazilian Minister of Industry, Development of Foreign Trade, Mr Luiz Fernando Furlan
Leading representatives of the South African and Brazilian business communities
Distinguished guests
Ladies and gentlemen

There is little that is stronger than a bond forged through a common struggle and South Africa and Brazil have had to forge strong bonds in a short period of time in seeking to overcome a range of challenges that confront marginalised communities both in our national environments and from the global perspective.

Globalisation, as we well know, presents developing countries with the paradox of both opportunity and threat. One notable opportunity lies in the area of trade and investment. Trade and investment are vital to economic growth and development. They encourage technology transfer and information exchange, and facilitate an exchange of goods and services that might not necessarily be available in the domestic market.

But trade can be a major threat if it is not fair and if it is not managed by the rules-based system that is equitable and promotes development.

Until July, we faced a serious risk that the development agenda agreed to at the Doha Round of the WTO was to be derailed. The critical leadership role played by Brazil contributed to ensuring that this risk was averted. In uniting developing countries and establishing the G20, we were able to take a strong stance in ensuring that the WTO negotiations proceed and that the possibility that our most serious trade concerns that will be addressed remains alive.

The role played by the G20 in overcoming the deadlock demonstrated unity among developing countries and their capacity to shape negotiating outcomes. There can be no lingering doubt that, as the G20, we have become critical players in the WTO negotiations and will no longer be relegated to the sidelines of international trade developments.

Our bond stretches beyond the multilateral arena. The similarities between our two countries at political, economical and social levels are striking. Both countries are confronted with challenges of unemployment and unequal distribution of economic resources and activities. We share similar perspectives rooted in these development challenges. We both are important economic and political players in our respective continents. The commonality in our position regarding global issues is indisputable. These many platforms of interconnectivity make our partnership natural and organic.

The South African government welcomes the inclusion of the Brazilian businesspeople in government missions to South Africa. These mutually beneficial networking opportunities allow for the establishment and deepening of economic partnerships and business-to-business trade relations.

Successful trade relations between our two countries are however also dependent on an appropriate trade regulatory environment. In this regard, significant progress can be noted. South Africa signed a Bi-National Commission with Brazil during 2000. Key areas of cooperation considered of mutual interest in the Agreement are Agriculture, Education, Energy, Industry, Environmental and Natural Resources, Mining, Micro and Small Enterprises, Health, Transport and Communication, as well as Shipping and Tourism.

There has been much progress in respect of our bilateral trade relations since the signing of the agreement. We have now regular missions between the two countries. The first meeting of the Commission took place in Brasilia during August 2002 and the second meeting was held in Pretoria during May 2003.

Under the auspices of the Joint Commission, a Trade and Economic Development working group was formed in the South African government. Projects in energy, medicine, sugar, leather, footwear, and SMMEs were identified as immediate priority areas. Some of these projects are at an exploratory stage and others have progressed faster.

Room for increased bilateral, however, still exists. A review of trade data between South Africa and Brazil indicates that the trade level is still relatively low. Currently, Brazil is ranked as South Africa's 30th largest trading partner. At the end of 2003, trade between the two countries stood at R6.7 billion. Whilst this represents an improvement from the trade value of R2.4 billion registered in 1998, the challenges that confront both our economies require far more interaction at the trade level between us. But I think that the overwhelming sense that prevails with regard to our relationship is that this is only the beginning.

The trade balance currently favours Brazil. This is testimony to the serious manner in which Brazilian business people have utilised the opportunities that our improved trade relations present. At the same time, this poses a challenge to South African business people. There is a clear need for South African business companies to acquaint themselves with the Brazilian market and explore the opportunities that this market presents.

The outcome of the current SACU-Mercosur trade negotiations will present further opportunities that need to be fully utilised by business. We expect the first phase of our negotiations, which involve an exchange of fixed preferences, will be completed by the end of the year.

I conclude by reminding you that today is the launch of the tourism month. South African not only offers a regulatory environment and infrastructure that are conducive to promoting the tourism business, but we also have an exquisite and beautiful country. So, while building partnerships and networking are important, I also want to encourage you all to take the opportunity of being here to relax a little and enjoy our South African hospitality.

Thank you.

Issued by: Ministry of Trade and Industry
3 September 2004