International Relations for Growth and Development

Presentation to theJoint Budget Committee

03 November 2004

Overview of Presentation

• Strategic considerations

• Policy rationale

• Engagements on the continent

• NEPAD

• Negotiating agenda – post 2000

• Negotiating issues

• Challenges

• Conclusion

Strategic Considerations

• Creation of favourable economic conditions for advancing SA’s developmental objectives

• Recognition that globalisation is a force for SA to contend with

• Multilateralism, including WTO engagements, are appropriate for pursuing economic growth and development

Strategic Considerations (cont..)

• Need to work with other developing countries in the WTO to promote common objectives around market access for exports, economic development & constructing a global economic system that is balanced and responsive to developing country interests

• An appreciation of the fact that regional trading arrangements & free trade agreements can promote economic development and integration into the global economy

Policy Rationale

Contained in: • Global Economic Strategy 2001 – currently under

review• Integrated Manufacturing Strategy 2002

Objectives:• Promote domestic economic reform• Isolation to global integration/re-positioning• Enhance competitiveness

exports + industrial competitiveness• Export growth (market access)

Policy Rationale (cont…)

• Reduce high production costs

• Allocate resource more efficiently

• Reverse anti-export bias

• Diversify by market and product (value added)

• Create sustainable employment growth

Strategic overview of the Strategic overview of the continentcontinent

Need to foster deeper relations on a bilateral basis.

Focus on regional investment, infrastructure development, intra-regional trade.

Diversification and the production of value-added products.

Technology transfer and skills development.

Utilization of the NEPAD framework to attain set objectives.

Engagements on the continentEngagements on the continent

• Derives from the global economic strategy• Aligned to the NEPAD framework• Pursues a developmental agenda in Africa• Underpins the need for regional economic integration• Needs a strategy of engaging the multilateral institutions

that are dominant in the continent, e.g. World Bank, ADB,UNCTAD, etc

• Takes cognizance of exogenous factors• Focuses on intensive bilateral engagement on the

continent

Regional strategies (Africa)

• Over-arching strategy premised on regionally-focused (sub-) strategies:

Southern Africa Equatorial Africa, i.e West, Central and East North Africa and the Middle East

• Intensify mutually-beneficial bilaterals within regions• Forge and consolidate strategic alliances with

strategic countries

Regional strategies (Cont.) (Cont.)

• Economic development and integration

• Collaboration on cross-border projects e.g. SDI’s

• Develop financing instruments/institutions

• Build capacity

• Develop complementary industrial strategies

• Build and enhancing regional institutions

Negotiations: Post-2000

Rationale• Political and Strategic considerations

• Advance domestic trade reform (pace/sequencing)

• Further enhance competitiveness

• Build on previous negotiating outcomes (further negotiated market access)

• Threats to multilateralism

• Proliferation of FTAs (competitive position)

Negotiating Issues

All Negotiations contain:

Tariffs Agriculture/industrial

Standards SPS, TBT

NTBs Quotas, Rules of Origin, Customs

Remedies Safeguards, AD, countervail

Dispute Mechanism

ChallengesChallenges

• Market Access : external ( WTO) » internal ( Intra-Africa

• Trade Facilitation – export finance» Customs» Logistics» Ports and documentation» Standards» Export promotion

ChallengesChallenges

• Production – diversification,

» expansion and

» beneficiation

• Infrastructure : assist in identifying projects,

» Scoping the project

• Investment facilitation : access to finance,

» reduce risk for potential development

partners

• Economic governance – technical co-operation

• New areas – regulatory framework

Conclusion

Growth Employment SMME’s BEE Competitiveness

Geographic spread

Investment Exports Women

Empowerment