Manuel’s Moves
As Minister of Trade and Industry, Trevor Manuel epitomizes the transformation that many have undergone as South Africans nurture their new government of national unity. President Mandela surprised many when he appointed Manuel to one of the most senior ·posts in his cabinet. Manuel had no formal experience in economics or finance, but this former African National Congress activist has diligently applied himself to his task. Gone is the activist’s rhetoric. In its place are measured pronouncements which are increasingly being heard with respect in the chambers of the IMF, GAD and World Bank. Simon Segalbriefly caught up with him for his views on future relations between South Africa and the US.
How would you like to see relations between South Africa and the US evolve?
The US accounts for 15 per cent of South Africa’s total two-way trade. This is well below the 50 per cent accounted for by the European Union. We want a greater spread, and, therefore, an increase
in the 15 per cent contribution from the US. However, the quality of this volume is important. We want to move away from our traditional trade structure that exports raw materials and imports machinery. South Africa must export more manufactured goods.
What products can South Africa manufacture competitively?
We cannot be specific. But there are sectors where we are competitive such as manufacturing certain earthmoving equipment and tank containers.
What concessions or favorable treatment is South Africa looking for from the US and visa versa?
Both countries comply with the recently concluded GAIT agreements. This restricts any favorable treatment. Earlier this year the US granted South Africa status under its General System of Preference. This will allow South African exporters to benefit from lower tariffs on certain goods. On South Africa’s side, government has committed itself to reducing tariffs over the next five to six years, from an average of 28 per cent to 18 per cent depending on the industry. There are no specific benefits to US exporters, but they will benefit from these lower tariff.
What advantages and opportunities does South Africa offer US traders?
Now that sanctions imposed on South Africa have been lifted, whole new markets open up for traders, both in South Africa and neighboring states. Also, South Africa has mineral resources which generate demand for all sorts of services that international corporations can supply.
South Africa and its neighbours might have big populations, but do they have the markets?
The South African economy is growing. This should impact on the region.
What are South Africa’s problems in trading with the US?
South Africa can compete globally only on a limited basis. There are enormous constraints around human resources, infrastructure and technical and technological capacity. Apartheid has distorted
South Africa’s regional development. There is also an anti-export bias from the days when the exchange rate was overvalued. This has now been partly corrected but attitudes take longer to
change. The over concentration of the South African economy has also contributed towards higher prices. Finally, small business has difficulty in getting access to facilities such as credit and technical and marketing support.
What structures or bodies do you foresee facilitating trade between South Africa and the US?
The inter-governmental US-SA Business Development Committee has just been established between South Africa and the US. The objective is to accelerate the normalization of US-SA trade relations with the emphasis on promoting black economic empowerment in South Africa. So trade relations
will be through the normal inter-governmental trade representatives – South Africa has five trade offices in the US – and organised business groups such as the South African Chamber of Business, South African Foreign Trade Organisation and other industry representative groups.
South Africa, The Journal of Trade, Industry and Investment
Publisher, David Altman
Writer, Simon Segal
