A Pahad to chair South Africa-Spain Annual Political Consultations, 17
Jul

15 July 2007

Madrid: South African Deputy Foreign Minister Aziz Pahad and Deputy Finance
Minister Jabu Moleketi today, Sunday, 15 July 2007 arrived in Madrid, Spain
during which Deputy Minister Pahad will together with his counterpart,
Secretary of State for Foreign Affairs Bernadino Leon Gross, co-chair the
fourth session of the South Africa–Spain Annual Political Consultations on
Tuesday, 17 July 2007.

Deputy Minister Pahad and Moleketi are visiting Spain within the context of
South Africa's priority to consolidate bilateral political, economic and trade
relations with Spain.

Issues on the agenda of discussions are expected to include, among
others:
* an overview of the current status of and prospects for increased bilateral
political and economic relations
* The African agenda including:
- an evaluation of the Spanish Africa Plan
- post conflict reconstruction and development with regard to the Democratic
Republic of Congo, Darfur, Côte d'Ivoire, Western Sahara, Equatorial Guinea and
Somalia
- the outcomes of the recently concluded African Union Summit
- African Union-European Union relations with particular reference to the
forthcoming African Union–European Union Summit in Lisbon at the end of
2007
- migration
- the conflict in the Middle East including Israel and Palestine, Lebanon and
Iraq
- nuclear non-proliferation
- an assessment of developments in the Latin American region
- the comprehensive reform of the United Nations and South Africa's tenure of
the non-permanent seat on the United Nations Security Council.

Deputy Ministers Pahad and Moleketi are expected to return to South Africa
on Thursday, 19 July 2007.

Bilateral economic relations

Spain is the eighth largest economy in the world and it is SA's ninth most
important export market. Despite the increase in two-way trade between South
Africa and Spain over the past five years and an increase of 1 473% in Spanish
direct investments in SA between 2003 and 2005, opportunities to increase trade
and investment relations remain plentiful.

Total trade between the two countries increased from €1,9 billion in 2005 to
€2,1 billion in 2006. In 2006, South Africa's exports to Spain totalled €1,4
billion (an increase of 7,6% on the 2005 figure). South Africa's main exports
were coal (€462 million), fish (€117 million), fresh fruits (€56 million), iron
and steel products (€161 million), chemicals (€33 million), industrial
machinery (€146 million) and automotive parts and accessories (€69 million).
Spain is South Africa's ninth most important export market.

Spanish exports to South Africa grew by 16,9% in 2006. The most important
products exported to South Africa were vehicles (€110 million), automotive
parts (€129 million), chemicals (€83 million), industrial machinery (€49
million), furniture (€15 million) and electrical goods (€9 million). During the
past 10 years South Africa's exports to Spain increased by a spectacular 274%.
Spanish exports to SA recorded a 300% growth.

Regarding investments, in 2005 South Africa remains the largest recipient of
Spanish outward investment in Africa. Other African recipients were Namibia
(€51,55 million), Morocco (€17,11 million), Cape Verde Islands (€8,47 million)
and Algiers (€1,97 million). On 23 June 2006 South Africa and Spain signed the
Avoidance of Double Taxation and the Prevention of Fiscal Evasion Agreement
with respect to taxes on income and capital. This Agreement, together with the
Agreement for the Reciprocal Promotion and Protection of Investments, signed in
1998, has laid the foundation for increased bilateral investment flows.

The following sectors in South Africa were to date targeted for Foreign
Direct Investments (FDI) by Spanish companies: metals (€245 million),
manufacturing of non metallic minerals (€119 million), automotives (€26
million), wood and cork (€26 million), construction (€15 m), chemicals (€4
million).

Spanish companies like Agricultural Credit Scheme (ACS) Dragados (Platinum
Highway), Acerinox (Columbus Steel), Grupo Antolín (Automotive), Irizar (luxury
buses), Ulma (packaging) and Union Fenosa (mining) all have investments in
South Africa. Spain could be considered as a source of FDI in the following
sectors: infrastructure, tourism, agro-processing and renewable energy.

Enquiries:
Ronnie Mamoepa
Cell: 082 990 4853

Issued by: Department of Foreign Affairs
15 July 2007