PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY

Executive Summary Recommendations

• The Committee finds that there is broad support for the basic objectives of the department's industrial strategy - raising competitiveness, encouraging innovation and technological upgrading and promoting employment. The shift from a policy based on high levels of protection, subsidy and state support for capital - intensive "strategic" projects to one based on lower tariff and supply side support for industrial restructuring also seems to be widely accepted. The objectives of many of the department's incentive schemes or supply side programmes likewise command broad support. It is noted however, that labour seeks a greater emphasis on employment promoting industrial policy.
  
  
• The Committee finds that the main problems arise in the practical implementation of supply side measures, and in the rate and pace at which supply side measure's are being implemented in relation to the pace of tariff reductions. Uncertainties and problems in accessing supply side measures also appear to be causing problems.
  
  
• The Committee recommends that the future direction of tariffs, particularly in view of impending Free Trade Agreements with the EU and SADC, be made more transparent and the subject of ongoing review by all stakeholders. The pace of tariff reform in relation to the pace of implementation of industrial policy and supply side measures needs regular careful monitoring to avoid excessive job losses. Labour argued that industrial capacity needs to be nurtured to build up local capacity.
  
  
• The Committee supports the harmonisation and simplification of the tariff structure. Increased attention is, however, required in the case of ambiguous catch-all tariff categories (such as "other" or "miscellaneous"). Such categories are often duty free and allow entry of competitive products in ways that industries cannot sustain.
  
  
• Increased consideration should be given to tariff reductions and supply side measures in relation to broader macro economic issues. The broader economic environment also impacts on our interaction with the global economy.
  
  
• Anti dumping capacity must be complemented by the strengthening of our capacity to monitor dumping, protective practices and subsidies in competitor countries and devise appropriate safeguards measures.
  
  
• The Department of Customs and Excise must continue to strengthen its effective control of goods entering the country. The Committee recommends that progress reviews be conducted of the Department of Customs. Security at the ports of entry must be enhanced and the impact of impending regional trade agreements on custom control taken into account.
  
  
• In consultation with the Department of Education, Department of Labour, industry and the trade unions, a detailed industry training and human resource development programme must be formulated and implemented for individual sectors.
  
  
• Science and technology institutions should be more responsive to the needs of industry. Several current programmes appear to be successful and should be complemented with additional schemes.
  
  
• Supply side incentives should be biased towards training, upgrading of human resource capacity and employment generating projects.
  
  
• Government departments and parastatals should contribute towards enhancing the competitiveness of South African industry.
  
  
• Processes for accessing supply side measures, reporting requirements and decision making processes need urgently to be re-examined with a view to reducing 'red tape' and bureaucracy. Greater clarity on who particular measures are intended to assist would be helpful.
  
  
• Government needs to indicate more clearly whether, and under what conditions, it is prepared to assist so-called 'sunset' industries in restructuring.

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Last Updated on August 31, 1998 by
Henri Fortuin from the CSIR