Trade Policy and Strategy Framework

Trade Policy and Strategy Framework

• International Trade and Economic Development
• Presentation to the Portfolio Committee on International Relations and Cooperation
• 02 September 2009
• Dr. Mzukisi Qobo

Introduction

• Trade Policy and Strategy Framework emerges in the context of broad national development strategy.
• Need to address key structural challenges in the domestic economy.
• Dynamic changes in the regional and global economic context.

Cont…Introduction

• Structural challenges: widespread poverty; severe inequalities; high levels of unemployment; and stunted growth.
• Production and employment patterns - capital intensive and skills-bias.
• Our export profile - highly resource-intensive and commodity-based.
• The previous growth path placed emphasis on capital goods in its industrial policy.

Cont…Introduction

• The TPSF complements the industrial policy which is a central component of the ASGI-SA.
• The objective of SA’s development strategy: to promote & accelerated economic growth along a path that generates decent jobs.
• A supportive trade policy and an appropriate tariff reform programme contributes to industrial development and upgrading, employment growth & export of sophisticated value-added products.

Linkages between trade and industrial policy

• Tariff policy to be decided primarily on a sector-by-sector basis and dictated by the needs of sector strategies.
• We have adopted a strategic trade policy: more calibrated and sequenced and assumes a developmental approach to tariff reform.
• Tariff policy supports industrial policy and delineates our terms of engagement in international trade negotiations.
• Carving a policy space in global economic relations to enable SA to pursue its developmental objectives.

Changes in Global Trade

• The nature of global competition has changed.
• Comparative advantage no longer determine success in international trade. A combination of factors, incl. processes of “self-discovery”, purposeful intervention and building of appropriate production capacities are at play.
• Fastest growing exports in world trade are non-resource based manufacturers, with medium and high-tech predominating.