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Product information
The grain policy environment
M
s Gerda van Dijk (Director of Directorate: International
Trade) looked at the current trade in grains and pro-
ducts. Exports of South Africa’s primary products
like oats, wheat, maize and buckwheat were high until
2013, but we have seen a decline in export of primary products
since then.
Anticipation is that there will be a significant increase after this
year’s bumper crop. There have been large imports which declined
in 2014, but are increasing again largely attributable to weather con-
ditions.
The export of processed products like flours and pastas has seen
consistent growth. There has been a decline in imports, however
Van Dijk says this is increasing again.
Global dynamics which currently
influence trade
The new Trump administration which has a more protec-
tionist approach and has indicated intent to re-negotiate the
North American Free Trade Agreement (NAFTA) (which includes
Mexico, about which his views are well-known).
The US has stepped out of the negotiations in the Trans-Pacific
Partnership Agreement, which includes countries in the East and
New Zealand. These all affect the multilateral trading system.
Trump’s protectionist view means challenges to any discussions
on domestic support, especially if he is going to protect US pro-
ducers and give them more support.
Brexit will definitely influence trade with the UK moving out of
the EU. This is significant since the UK is the biggest market
for many South African commodities. We need to work very
closely with the UK towards ensuring there is no distortion in the
current trade between us.
The slowing down in world economies, e.g. China.
Van Dijk says it is her department’s view that tariffs are play-
ing a lesser role while the issues of sanitary and phyto-sanitary
measures are increasing in importance, as are the technical
barriers to trade and also the non-tariffs barriers which are in-
creasingly in evidence world-wide, making it difficult for prod-
ucts to move across borders.
The impact of the so-called Fourth Industrial Revolution.
The growth in digital trade including the use of robots, which
will influence job opportunities.
Multi-lateral trade rules and the WTO
The 1995 Marrakesh Agreement states that all products and all
countries have means to protect themselves, e.g. rules against
dumping, countervailing- and safeguard measures including a spe-
cific agricultural safeguard measure, which South Africa has not
yet employed but is currently re-visiting. Van Dijk says the issue of
domestic support needs to be more transparent and predictable.
In fact it needs to be done away with in order to level the play-
ing fields where those producers receiving support are able to be
more competitive than others not receiving support in the form of
subsidies.
Van Dijk maintains there is ignorance about opportunities available
through market access quotas which require that countries allow
some products in while South Africa must also create opportunity
for other countries to export to us.
Current negotiations
The on-going DOHA negotiations with 162 member countries (since
2001) have not reached agreement but milestone victories have
been achieved, e.g. elimination of export subsidies, trade facilitation
agreement, public stock holding for food security purposes and in-
creased support to the cotton industry.
Regional trade agreements are increasingly more important, es-
pecially if we experience marginalisation internationally. African
countries need to collaborate and have an ‘African voice’ in the mul-
tilateral trade arena.
South Africa no longer negotiates alone but within the South
African Custom’s Union (SACU) block. Regional value chains and
value addition deserve attention to strengthen the region, thus all
current negotiations are focussed on establishing a ‘continental
free trade area’.
Van Dijk described numerous trade agreements like the Econom-
ic Free Trade Association, the India Preferential Agreement, the
SACU-MERCOSUR Preferential Trade Agreement and the US-Africa
Growth and Opportunities Act (AGOA) where her department par-
ticipates in policy formulation.
She also warned that the pressure on the South African poultry
trade is not going to go away and believes South Africa and SACU
need to examine their view on trade relations with the US.
27
April 2017
FEEDBACK
Congress
Special
JENNY MATHEWS,
SA Graan/Grain
contributor
“
...there is ignorance
about opportunities
available through
market access quotas
which require that
countries allow some
products in...
“