Rob Davies, South African Trade and Industry Minister has urged fellow BRICS countries to strengthen and deepen their relations in a time when the world’s trading systems are in turbulence.
“It is no secret. We living in a time of enormous turbulence and crisis for the global multilateral system. We need to strengthen and deepen our relations,” said Davies on Wednesday.
Speaking at the Brazil, Russia, India, China and South Africa (BRICS) Business Forum opening session at the Sandton Convention Centre, Minister Davies said the current environment poses an enormous challenge.
“What we’ve seen is a number of stronger economies, particularly one showing great scepticism to multilateral trading system which is not good to any of us. We are in the midst of trade wars – South Africa is not a major protagonist [but is hit by]collateral damage,” said Davies.
The Minister was referring to the United States decision to impose Section 232 steel and aluminium tariff duties. US President Donald Trump signed proclamations granting permanent country exemptions to a select number of countries and extended by one month the Section 232 steel and aluminium tariff duty exemptions for some.
The proclamation followed the 8 March proclamation signed by President Trump to impose a 10% ad valorem tariff on imports of aluminium articles and a 25% ad valorem tariff on imports of steel articles. This excluded select countries namely Canada, Mexico, the European Union, South Korea, Australia, Argentina and Brazil.
At Wednesday’s session that brought together captains of industry and government officials, among others, Davies said South Africa was not given exemption from the tariffs, adding that the US decision was affecting the country.
“Institutions like BRICS become very important to promote investment led trade,” he said, adding that the bloc should work on identifying complementarities with one another.
He said that last month’s trade ministers meeting identified complementary trade as a future mechanism among the BRICS countries.
Davies said it was important for South Africa to move from exporting primary products as the technology revolution unfolds.
He said BRICS countries which account for more than a third of the world’s population should invest more in each other.
“In the recent past, BRICS countries have been a disproportional source of global economic growth,” he said.
South Africa as the only African member of the bloc is also keen on helping to bring about development on the continent.
Integrating the African continent
“As South Africa we have taken important steps forward to promote integration, beyond regional economies and move towards integrating the continent as a whole,” he told those gathered at the session.
Davies said South Africa like other countries are in the process of preparing to ratify the recently signed African Free Trade Area (AfCFTA) agreement.
South Africa, he said, is not only seeking to increase trade with the continent — which is paltry — but that it wants regional value chains to industrialise the continent.
“We need to support investment in other countries,” he said, adding that South Arica believes in the path of investment and trade.
As a form of facilitating investment, South Africa has set up Invest SA One Stop Shops to assist investors.
“Our approach has been that we will offer investment basic guarantees through the One Stop Shop,” he said.
Progress made by Business Council
Meanwhile, South Africa is pleased with progress made by the BRICS Business Council, which will present its annual report to Heads of State on Thursday.
Chair of the Business Council, Dr Iqbal Surve, said the trade barriers has led to much anxiety but that since the inception in 2013, the council has made several achievements. These include the Memorandum of Understanding with the Development Bank on closer cooperation that was signed in 2017 as well as the e-commerce platform to service BRICS countries.
The recent 6th meeting, which was held in Durban, was attended by over 400 delegates from all BRICS countries
This, said Surve, is the largest gathering in the history of the bloc, adding that trade barriers not only kill business but are harmful to people.
The long term key recommendations made by the council include making provisions for long term visas and harmonising the recognition of qualification among BRICS countries.
He urged BRICS countries to roll back red tape and roll out the red carpet for business.
Russian Minister of Economic Development, Maxim Oreshkin, said his country is open for business, adding that the recently conclude FIFA World Cup that was held in his country was well supported by tourists.
He said work being done by his government with fellow BRICS countries included work with China on aviation, while there was cooperation with India on port facilities.
Meanwhile, Davies welcomed the investment announcement made by China on Tuesday. This as the South African government has signed several agreements with China, including an investment commitment from China to the tune of $14.7 billion.
Some of the agreements signed are in trade and industry, agriculture and science and technology, including a visa agreement.
The business forum, which forms part of the 10th BRICS Summit, seeks to reflect on economic progress made, and on driving trade among the BRICS countries, among others.
The Summit will conclude on 27 July 2018.