Trade and Industry
29 March 2007
Mr Hans Jeppson, State Secretary for Trade of Sweden
Your Excellency, Mr Anders Mollander
Ambassador of Sweden to South Africa
Officials from the Governments of South Africa and Sweden who are present here
today
Business leaders from South Africa and Sweden who are participating in this
event
Ladies and gentlemen
Sweden has a very special place in the historical memory of South Africa.
Swedish solidarity with our struggle for liberation made a very significant
contribution to the eventual triumph of non-racialism and democracy in this
country. As a result, we have a very powerful and very solid people to people
relationship.
We are participating today in an event which we believe can contribute to
one of the objectives our two countries have each defined since 1994, namely,
to translate those ties of solidarity and our strong bonds of people to people
relations into growing mutually beneficial economic interaction between our two
countries. Sweden is of course a member of the European Union (EU) and as such
the basic trade framework between us is set by the Trade Development and
Co-operation Agreement (TDCA) in force between South Africa and the European
Union, but while the TDCA provides the basic framework, the kind of
relationship which I think we need to aspire towards can perhaps be described
as EU plus (+). That is to say that from our point of view, we look to Sweden
as a particularly significant and strategic member of the European Union with
whom we would seek to build a stronger and deeper relationship than with the
European Union as a whole. This requires of us that we work energetically at
the bilateral level to complement and enhance the basic EU framework.
Mr State Secretary, Ambassador, ladies and gentlemen, if we look at the
gross trade statistics, we see a welcome and pleasing increase in our two way
trade in recent years. Between 2004 and 2005, our trade increased by 21% in
nominal terms and between 2005 and 2006, it increased by a further 37%.
However, these increases have taken place off a relatively low base and our two
countries are ranked relatively low down the list of individual trading
partners. For example in 2006, Sweden was ranked 26th as a destination for
South African exports, below seven other EU member counties. As a source of
imports, Sweden was ranked 18th, behind five other EU member countries. The
balance of our two way trade favours Sweden and the pattern of our trade is
typical of that between developed and developing countries in that 41% of our
exports to Sweden are accounted for by base metals with a smaller scattering of
value added products such as machinery and vehicles. Our imports by contrast
from Sweden are overwhelmingly value added products, machinery, mechanical
appliances, vehicles and aircraft, chemical products, optical photographic
products and the like.
In terms of investment, recent years have seen significant investments by
Swedish companies in the manufacturing sector in South Africa in the metals,
machinery, chemicals, rubber and related sectors, with Swedish investments of
over R700 million in 2005 bringing the total of Swedish investment to around
about R1 billion.
In the Bi-National Commission which has been operating between our two
countries since 2000, we have identified the need for a series of practical
facilitative actions to create conditions for a mutually beneficial expansion
of economic relations between our two countries. We welcome the fact that
Sweden has expressed an interest in assisting Southern African countries in
trade related capacity building initiatives and we are hoping in the near
future to be able to submit concrete proposals to the Swedish embassy based on
consultations which we have been undertaking at the level of the Southern
African Development Community (SADC) and the Southern African Customs Union
(SACU) secretariats.
We have also agreed to create an internet portal which can link up potential
South African exporters with the Open Trade Gate Sweden, the Swedish one stop
information centre to potential exporters. In this context we welcome very much
this initiative today as well as the event with women entrepreneurs which took
place yesterday.
Mr State Secretary, Ambassador, we appreciate very much the fact that you
have taken the trouble to organise an event in South Africa which can help make
South African businesses much more aware of the opportunities that exist for
them in relations with Sweden.
This event is taking place at a time when South Africa is better placed than
it has been at any time in the past 30 years or so to benefit from
opportunities in the external economic arena. We are in the midst of an
economic growth surge which is higher and has been sustained over a longer time
period than at any moment in the past 30 years. Economic growth over the last
few years has been consistently in excess of 4,5% and is projected to
accelerate to 5,4% by the year 2009. However, we recognise that this is
insufficient to make a decisive inroad into the struggle of poverty and
unemployment and accordingly our Accelerated and Shared Growth Initiative for
South Africa (AsgiSA) has been formulated with the objective of raising the
growth rate to an average of around 6% by 2014 and also by ensuring that the
growth has a more shared content. One of the central pillars of the AsgiSA
programme is an infrastructure investment programme valued at over R300 billion
which will address infrastructure backlogs and reduce the cost of doing
business in South Africa.
We will also as you are well aware, be hosting the 2010 FIFA Soccer World
Cup. Significant infrastructure development related to that event is already
underway including stadium building, public transport programmes, improvements
in Information and Communication Technology (ICT) and in the overall tourism
infrastructure. We believe therefore that we have a solid basis domestically on
which to expand mutually beneficial relations with partners in the outside
world. The Trade Development and Co-operation Agreement which we have with the
European Union is currently undergoing review. We have an understanding with
the European Union that this process should be harmonised with the ongoing
Economic Partnership Agreement negotiations with African, Caribbean and Pacific
Group of States (ACP) regions and particularly the process ongoing in the SADC
negotiating configuration. Within that context we have called for a
harmonisation of our terms of access into the EU market as a contribution
towards ongoing processes of regional integration in Southern Africa. We know
that there are sensitivities within the EU in this regard but we also know that
we can count on the support of countries like Sweden in pursuit of a generous
development orientated outcome to these negotiations.
We are also meeting at a time when critical decisions will need to be taken
if the World Trade Organisations (WTO) Doha Round is to move forward. While all
of us are actively involved in these processes, it is no secret that a
successful conclusion to the Doha negotiations will depend to a very large
extent on the development of political will in the major advanced
industrialised trading blocs to sustain offers that can give real developmental
context to a WTO agreement. Again the eyes of the developing world will be on
countries like Sweden to play an active and leadership role in discussions on
these issues within the EU.
Mr State Secretary, Ambassador, ladies and gentlemen, as I have already
indicated, we regard today's event as an important contribution by Sweden
towards facilitating an enlarged mutually beneficial economic interaction
between our two countries. I hope and trust that the business leaders that are
present here today will find the presentations useful and informative. More
than that though, we look forward to them following up on the information that
they are given here today and perhaps particularly, the Open Trade Gate Sweden
with concrete actions which we will be reflected in constant steady
improvements in the trade statistics. Let me assure you Mr State Secretary, Mr
Ambassador, that our department and ministry also have an open door with regard
to anything that we can do to facilitate these processes.
I thank you for your attention and wish you well with the rest of the
event.
Thank you very much.
Issued by: Department of Trade and Industry
29 March 2007
Source: Department of Trade and Industry (http://www.dti.gov.za)
