TRALAC - Trade Law Centre

Erwin to Visit US in New Bid to Attract Investment to SA

Wednesday, 16 April 2003

Source: Business Day

TRADE and Industry Minister Alec Erwin is off to the US next month in an effort to woo new investment into SA.

The trip is designed to persuade US businessmen that there are enormous opportunities in exportoriented projects in SA; to cash in on the trade concessions offered by the US under the Africa Growth and Opportunity Act (Agoa); as well as to highlight SA's various competitive advantages.

Trade opportunities are likely to expand under the planned free trade area (FTA) agreement which is due to be negotiated between Washington and the Southern African Customs Union (Sacu), in which SA is the largest economy.

Erwin's visit is expected to include discussions with leaders from the automotive, textile, clothing, agribusiness and call centre industries, all of which show great promise for US investors in SA.

"The minister is due to visit Chicago, New York and Detroit for a week-long trip in mid-May," said a Pretoria official. "He will mostly be meeting business leaders to discuss Agoa and the opportunities which exist under this programme, as well as to look at the potential under the planned free trade area."

SA Chamber of Business CE James Lennox said, in the context of Agoa and the proposed FTA, "the US market is a significant untapped market for SA. There is room for big growth there."

He supported Erwin's planned investment promotion mission .

"If he can increase the benefits already flowing into the economy from Agoa, that will be very good news for SA."

Lennox said follow-up discussions between both countries' business leaders would help bring new investment to SA. "Investments also come from relationships between businesses, and SA business is willing to follow up on any leads Erwin may develop."

Lennox said he believed the automotive sector had the greatest immediate "exciting" potential for attracting export-oriented investment from the US.

Ford SA is seeking new business from its US parent; BMW SA has been the most successful local business in exploiting Agoa; and there is immense scope for greater SA production of automotive components for export.

Deloitte & Touche trade expert Francois Dubbelman said Erwin's trip was "a strategic trade mission.

"The fact that the focus is on potential US investment in sectors such as the automotive and textile industries could indicate that these are some of the key industries on which the FTA agreement would be centred ."

He suggested Erwin should highlight SA's important position as the growth engine of sub-Saharan Africa and as an entry point into the African market.

Investors in export-oriented industries would also need to be briefed on SA's preferential trade links, and potential links, to various trade blocs such as the European Union and Mercosur.

Erwin is also expected to brief US business on the various investment incentive programmes which his department offers.

He is also expected to highlight SA's preference for so-called "valueadded" investment which add value to SA raw materials before they are exported.