Fostering SA markets
THERE has so far been an eerie silence from the South African government on the change of government in Washington, except for the courtesy pronouncements that we look forward to working with the new administration. In fairness to our governing structures, they may not know what to expect and are waiting for US President Donald Trump to make the first move.
As Washington itself is learning however, Trump is not an easy person to read. He is mercurial, impulsive and has a fragile ego. His pattern so far seems to be exercise power with diplomacy on the back seat.
However Trump has signalled two ways of looking at the world which will govern his foreign policy. He believes in bilateralism and abhors internationalism. It was therefore no surprise that his first order of business in foreign affairs was to invite England to join with him in fostering a new bilateral economic relationship, and at the same time terminate American participation in the Trans Pacific Partnership agreement.
England left the European Union to chart an independent economic course of its own.
As he moves around the globe tearing up treaties he doesn’t like and knitting together new bilateral relationships, Trump will eventually focus on Africa. On his desk will be the Agoa agreement with its free tariffs for African products.
If he stays true to his preference for bilateralism, Agoa, which has been the centrepiece for trade with Africa since 2000, will be in harm’s way. The potential impact on SA could be great. We export 60 000 cars for the US market duty free.
The motor industry is also one of the industries whose manufacturing plants Trump wants relocated into the US to provide jobs for American workers. He can accomplish this by reinstating tariffs and increasing taxes on cars exported into the US.
Trump is currently fending off enemies real or imagined in Washington. He is a president who values personal relationships. It would be an opportune time for SA to pay him a courtesy visit. We should explore where South Africa and the US can continue to work together to strengthen, not weaken trade relations.
If the US president remains unmoved, SA will have to intensify efforts to look for new markets for its products. Not to be ignored is the African market on our doorstep. Rising incomes together with the removal of trade barriers creates new market opportunities for our car industry.
As the agriculture economy, prioritised by most African states, matures, a specialised market for small trucks and delivery vehicles may emerge.
In a strange way the thriving illegal cross border trade in South African cars may be an indicator that the demand already exists. We are also well placed technologically to manufacture cars and trucks suitable for African conditions. — Wongaletu Vanda, via e-mail
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