USAID and the WCO Trade Facilitation Conference. Opening Remarks by Dr Rob Davies, MP Minister of Trade and Industry Republic of South Africa

Transcription

1 USAID and the WCO Trade Facilitation Conference Ladies and Gentlemen Opening Remarks by Dr Rob Davies, MP Minister of Trade and Industry Republic of South Africa 10 September 2012 Let me begin by thanking the World Customs Organisation and USAID for organising this Conference on Trade Facilitation, and also for inviting me to share some the South African Government s perspectives on this important issue. I want to acknowledge the presence of the US Ambassador to South Africa, His Excellency, Mr Donald Gips. This Conference takes place against the backdrop of ongoing and profound structural change in the world economy. The past few decades have seen the rise of the emerging economies as the new sources of global economic growth and trade and investment flows that are re-defining global economic geography. These global changes have been accompanied by significant improvements in Africa s economic and development prospects. Africa is already the second fastest growing continent in the world after Asia and offers the highest returns on investment of any region. 1

2 Growth in Africa has been driven by the boom in the minerals, agriculture, transport, telecommunications and retail sectors. Africa s enormous reserves of raw materials, 60% of the world s unused arable agricultural land, a young growing population, a growing middle class with considerable purchasing power, and urbanisation alongside steady improvements in economic governance are all factors which could see Africa becoming the next leading source of global economic growth. However, Africa s full economic potential will remain unfulfilled unless we address the challenges of inadequate infrastructure, the limitations imposed by small and fragmented markets, and inadequate diversification of industrial output, all of which are responsible for the low levels of intra- African trade. South Africa is championing an ambitious integration and development agenda in Africa. In particular, we are seeking to advance what we call development integration in the Southern African Customs Union (SACU), the Southern African Development Community (SADC) and in the recently launched Tripartite Initiative to integrate SADC, the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA). By development integration, we mean an approach that combines market integration, cross-border infrastructure development through the Spatial 2

3 Development Initiatives, and policy coordination to advance regional industrial value-chains. We have pursued this agenda with a good degree of success in SACU and SADC contexts, and it underpins the approach we have all taken in the SADC-EAC-COMESA Tripartite initiative. SACU remains the anchor for wider integration within the Southern African region. South Africa is working with Botswana, Lesotho, Namibia and Swaziland (BLNS) to implement the SACU five-point work programme, which focuses on: 1. promoting regional industrialisation through the establishment of cross border value chains; 2. reviewing the revenue-sharing formula to more directly support infrastructure development and industrialisation; 3. advancing trade facilitation initiatives among the member states; 4. developing common SACU institutions; and 5. promoting unified engagement in trade negotiations with third parties. On the industrial policy front, SACU partners have identified 8 sectors to build cross-border value-chains, with agro-processing as the pilot project. Market integration is well-advanced in SADC. The SADC FTA should be fully implemented in 2012, with almost all tariff lines traded duty-free. The product lines traded at zero per cent currently stands at 92%, against the baseline of 85% in

4 In line with our developmental integration approach, South Africa will continue to prioritise the consolidation of the SADC FTA, working with Member States to implement their obligations, and focusing on sectoral cooperation, promoting regional productive capacity and infrastructure, addressing non-tariff barriers and simplifying rules of origin, harmonising standards, and advancing the work on trade facilitation. As noted, in 2009, the Members States of SADC, the EAC and COMESA initiated a wide ranging initiative for integration that will be built on market integration, industrial development and infrastructure. These three pillars will be pursued concurrently in order to ensure an equitable spread of the benefits of regional integration. Negotiations have commenced in the market access pillar, which as the first stage will cover trade in goods. The Summit that launched the T-FTA proposed a deadline of April 2014 for conclusion of the trade negotiations, with implementation of the T-FTA scheduled for This ambitious deadline provides the impetus to work expeditiously on the trade integration pillar to which we are all committed. Once established, the T-FTA will combine the markets of 26 countries with a population of nearly 600 million people and a combined GDP of US$1 trillion, providing the market scale that could launch a sizeable part of the continent onto a new developmental trajectory. Importantly, the T-FTA will form the basis for an Africa-wide FTA, which is expected to create a market of US$2.6 trillion. 4

5 This Continental FTA (C-FTA) will address the challenge of small and fragmented economies in Africa. A larger, more integrated and growing market would enhance the interest of foreign investors in Africa and provide an important underpinning for continuing to enhance intra-african trade. You will note that trade facilitation features prominently in our work on integration across the continent. Broadly speaking, trade facilitation work would fall under the infrastructure pillar but some of the rule-making in this area could be part of the FTA negotiating outcome, notably in respect of rules related to certificates of origin and customs administration and cooperation. Trade facilitation can be construed broadly to interventions that include provide hard and soft infrastructure to facilitate the movement of goods, services and people across borders. The work being undertaken on the North-South Corridor to upgrade rail and road infrastructure, can certainly contribute to facilitating trade in the region. The establishment of one-stop border posts which would involve hard infrastructure along with measures to improve efficiencies regarding on customs procedures and customs documentation can also help to reduce the transaction costs associated with cross border trade, which are particularly high in Africa and in our region. In SACU, the work on trade facilitation is being lead by our respective customs authorities the South African Revenue Services (SARS) in the case of South Africa. This work extensive and technically complex - has 5

6 focused on building IT connectivity among the SACU member states, as well as on strengthening Risk Management and Enforcement measures. I am pleased to note that SACU members have drawn on the considerable expertise that resides in the WCO on a range of trade facilitation matters. I am informed that the WCO has supported our work on national Customsto-Business Stakeholder Forums; implementation of national preferred trade programmes; as well as the ongoing work on risk management techniques and joint enforcement activities. SARS has been deeply involved and at the forefront of the work in region to ease cross border trade. SARS has considered the viability of the so-called "singe window" option as a possible technological support for measures to facilitate regional trade but considers that this would fall outside the scope of its current approach and priorities in the region. Let me conclude with a brief word on South Africa s approach to the Trade Facilitation negotiations in the WTO. One would be forgiven for thinking that trade facilitation would be one non-controversial issue in the Doha Round negotiations. This is not the case, however, and the contest arises in two respects. First, the Doha mandate for trade facilitation envisioned that as legal commitments in this area could impose onerous obligations on countries to upgrade their soft and hard infrastructure as regards customs administration, developing countries would undertake such commitments only if adequate technical and financial support was provided. The difficulty 6

7 the membership now encounters is that while the legal commitments would be binding, it is difficult to obtain binding commitments on the necessary support. This issue lies at the core of disagreements in the negotiations on trade facilitation. The second issue concerns the broader state of the negotiations. Many members are hesitant to conclude an agreement on trade facilitation outside of agreement on what is often seen as other more pressing issues on the agenda, such as reform in agriculture for example. These members are concerned about an approach to negotiations which amount to cherrypicking issues of interest to some but not others. Together, both these issues have effectively stalled negotiations on trade facilitation in the WTO. With these few remarks, let me conclude by wishing all the participants here today a fruitful conference. Thank you. 7