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Thursday, 01 August 2013

SA moves to reassure EU after trade deal fallout

On July 18, South Africa’s president Jacob Zumamade reassured the European Union (EU) that his country relationship with Europe is important and strategic, a day after tensions over trade deals boiled over at an South Africa-EU business forum.

This comes after that in the opening remarks at the South Africa-EU business forum held on July 17, in South Africa’s capital, Pretoria (the event was a precursor to Thursday’s South Africa-EU summit), EU trade commissioner Karel de Gucht warned South Africa not to take its relationship with Europe, its biggest single trade partner, for granted.
He said that the EU investors were watching South Africa carefully after the recent unilateral cancellation by South Africa of certain bilateral investment treaties with EU member states. Specifically, he referred to the bilateral investment treaties with some European Union (EU) member states, including Belgium and Luxembourg, and most recently with Spain which were unilaterally revoked by South Africa.

Also in reply, South African Trade and Industry Minister Rob Davies, said that the withdrawal from the treaties is actually imposed by their expiration. He also ensured that their expiry puts in no way their investments at risk, or any threat to trade. In his letter, Mr Davies said: "We have repeatedly stated that South Africa has and will continue to offer robust protection for foreign investors." He also wanted to underline that South Africa did not have similar bilateral treaties with the US, Japan or India, but this " has not deterred investment inflows from investors in those countries".

The article remarks that this move would be part of EU’s effort of staying competitive in front of the emerging giants (the Brics) for the trading and investments in South Africa, and, broadly speaking, the African continent.

Total trade between the two parties since 2004 has grown 128%, while trade last year was topping R500bn.The EU remains South Africa’s largest overall trading partner, and its largest investor. However, trade had dropped off sharply from pre-crisis levels as EU demand for South Africa’s products has fallen, but exports from the EU to South Africa grew faster.

Source: European Commission, businessnews, bdlive.co.za

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