Davies takes a tough line on exports in Zimbabwe trade skirmish

TRADE and Industry Minister Rob Davies has vowed to fight the substitution of any South African products imported into Zimbabwe with goods from other countries.

South Africa’s hardened stance comes after it was taken by surprise by Zimbabwe’s restriction on imports of basic foodstuffs and consumer goods from South Africa.

The two governments have also discussed tariff lines.

“We’re not prepared to accept that,” Davies said on Friday, adding that the government had not expected the move by the Zimbabwean government and had not been informed.

He said South Africa and Zimbabwe had initially been in discussion about reducing 1 000 tariff lines to “a couple of 100”, when Zimbabwe announced the import restrictions.

Davies was speaking on the sidelines of the launch of the Trade Invest Africa initiative which is intended to help South African companies identify opportunities on the continent.

Peter Draper, an international relations expert, said tools at South Africa’s disposal included blocking imports from Zimbabwe, or withdrawing concessions. “We could engage in a trade war that is pretty unhealthy for Zimbabwe, but most unhealthy for the informal trade industry,” he said.

The restrictions affected mainly traders at the border post. The Department of Trade and Industry has not yet calculated the losses to South Africa, according to Davies.

Some estimates put the loss for independent traders at nearly R100million. Zimbabwe has also been battling a cash crunch and struggling to pay civil servants.

Zimbabwe’s Minister of Industry and Commerce Michael Bimha is expected to meet South African officials within a week, after which Davies will consult the cabinet for direction.

Zimbabwe can approach South African Development Community countries to argue its productive capacity is at stake and request a legal condonation of its restrictions, said Davies.

A deputy director-general at the Department of Trade and Industry, Xolelwa Mlumbi-Peter, said banned products included cheese, some woven fabric, steel and cosmetics. Zimbabwe had relaxed some bans “but they are still of concern to South Africa”, she said.

Mlumbi-Peter said the department was analysing the impact of Zimbabwe’s decision and had discussed it with South African companies, among them Tiger Brands, to develop a coordinated approach.

“Where Zimbabwe is not producing, we should be able to send the products. Where they are producing let’s work together, including through investment and promoting South African investment, to boost productive capacity in Zimbabwe,” she said.

South Africa’s 2015 exports to Zimbabwe amounted to R300-billion while imports were R114-billion.