N Io country ever imported itself to economic growth wasn’t invited to the financial deficit. MOAB (mother of all braais) held last week by United States ambassador Patrick Gaspard to celebrate the return of dumped US chickenleg quarters - a consequence of which was renewed African Growth and Opportunity Act (Agoa) trade concession benefits for our agricultural exporters.
Now, why wasn’t I invited when Donald Mackay, whose glib slip across the truth in a recent Mail & Guardian opinion piece will linger on in many minds long after the MOAB’S ashes have been discarded? Mackay (representing importers) and I (representing the South African poultry industry) often compete for the truth in submissions to the International Trade Administration Commission of South Africa.
No country of any size has ever imported itself to sustained economic growth. Trade is an exchange; both countries need products to exchange before trade becomes a developmental vehicle - or else it is simply a fiscal and
Space in the global economy
Today, if you want a space in the competitive global economy, you either make things or provide services. Our national trade policy aims to encourage local production of a range of products to sustain existing jobs and create new ones, and to help effectively integrate our economy into an often distorted global trading environment.
We are all part of a global and interconnected economy. Just as we are grappling with the potential loss of our steel industry, so is the United Kingdom. In which country would the loss of such an industry cause the most social harm? The answer is quite clear: it would be us, because our economy is much less diverse and sophisticated than the UK’S and therefore less able to absorb shocks to the system. In both cases, the underlying problem is the same: overproduction in China and the realisation that this overhang will not disappear any time soon.
Import – and be damned?
For all the products Mackay lists, the majority, or near majority, of all production is local. It makes more sense to consider the effects of government support when the picture is more nuanced. Why, for example, is there no tariff on rice imports but there is one on wheat? Simply because we have never successfully produced rice, but we used to produce most of the wheat needed in our country (although now we produce about half of our requirements).
So what caused the change? A positive explanation is that South Africans are wealthier now than they were predemocracy, so more of us are moving away from maize as our only source of carbohydrates.
Another explanation is less positive, namely that our development of wheat cultivars has slowed post democracy, weather patterns have changed and the brutal economics of→