International Relations for Growth and Development Presentation to the Joint 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 continent  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 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

(Cont.) Regional strategies (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

Challenges Market Access : external ( WTO) »internal ( Intra-Africa Trade Facilitation – export finance »Customs »Logistics »Ports and documentation »Standards »Export promotion

Challenges 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