Tag Archive | department of trade & industry

SACU trade split a result of EU bullying, says DTI

No choice for minorities…..

sacu logoThe department of trade and industry is not blaming SACU members for signing EU trade agreements despite SA protests, since in reality “a gun had been held to their heads” and, as small countries, they had been presented with little choice but to sign.

This was said by Dr Rob Davies, minister of department of trade and industry (DTI), when advising the portfolio committee on trade and industry of a number of important decisions that were shortly to be made regarding the future of the South African Customs Union (SACU).


Although the revenue generated from the SACU was significant for smaller economies within the union of South Africa, Botswana, Lesotho, Namibia and Swaziland (BLNS), a major decrease in customs revenue during the current global economic recession and “significant disagreements” amongst BLNS members, particularly over the EU trade agreements, had caused a slowing down of the development of new partnership agreements.

Minister Davies said South Africa had proposed a 5-point plan.   However, progress towards a satisfactory relationship between the parties “had been rather uneven”.    , Whilst 50% of the revenue was shared between the partners other than South Africa and South Africa contributed as much as 98% towards revenue, tariffs were in one way or another set to benefit South African industry as the most industrialised country in the partnership.  The other parties were sensitive to this, he said.

Starting again

sacu mapMinister Davies said that currently, DTI was busy with the implementation and promotion of the new SACU agreement “which in the past had a long history of uneven colonial and apartheid arrangements which were first established in 1910 to serve British colonial interests.”

A new SACU agreement had been put into force in 2004, he said and had served until now. A common external tariff was maintained under the agreement, which allowed for free trade within the SACU market.

New development plan

The 5-point plan for a future agreement, the result of a summit talks meeting, was to investigate whether customs revenue should go to industrial development projects; whether revenue be used to develop value chains from one country to another; how to prevent the proliferation in smuggling; the necessity to build a centralised secretariat to run the SACU and, finally, how to strengthen the engagement with foreign countries on trade matters.

For South Africa, Dr Davies maintained the key aspect of any plan was to contribute in a way that gave financial certainty for BLNS members for financing of regional infrastructure plans and for industrial development projects. He maintained that if these countries grew, then South Africa would benefit from increased markets.

He further added that little progress had been made “due to the lack of change in the financial flow of the revenue”, indicating that a key reason for lack of progress was because of divergences in policy perspective and policy priorities among members of the SACU.

Motives in doubt

Looking ahead, the minister said differences were emerging as a result of clashing views on the role of tariffs since South Africa viewed tariffs as tools of industrial policy, while for other countries tariffs were mainly viewed as a source of revenue. “This is primarily an issue of the countries who view themselves as consumers rather than producers”, he said.

“In addition, without common industrial and trade policies among SACU members, consensus decision-making was continually at risk of gridlock.”

Two core challenges remained unresolved within the SACU, minister Davies told parliamentarians.    First, was the development of common policies among countries that varied dramatically in terms of economic size and population, as well as levels of economic, legislative and institutional development.     Secondly, there was a lack of an effective decision-making procedures within the general body that was able to take into account differences amongst the members.

“As such, the next steps that South Africa took were vital to the process”, he said.

Frank talks

Minister Davies said South Africa had now to re-assess how best to advance development and integration in SACU and then have an open discussion among SACU members.  The development of a common approach to trade and industrial policy was the most urgent matter, he said, with a discussion on appropriate decision-making procedures on sensitive trade and industry matters.

Parliamentarians asked whether, since this appeared an uphill battle, DTI should not rather instead concentrate on advancing the Southern African Development Community (SADC) but minister Davies said that whilst the SACU was indeed not the most important entity in the region, it was an important aspect in the broader goal of creating harmony in the region and better trading prospects.

The main priority for regional integration, he said, was the creation of large regional markets that could serve industrial integration between countries and, meanwhile, the SACU issue had to be resolved along the way.

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B-BBEE Codes for IT industry now regulated for by DTI

In a recently gazetted publication, the sector charter and broad-based black economic empowerment (BBBEE) code for the information and communication technology (ICT) sector were published by the department of trade and industry (DTI).

According to a media statement published by DTI’s minister Dr Rob Davies, a 30% black ownership target has been set for entities in the sector, the ICT sector charter having much in common with DTI’s generic BBBEE code. However, the equity equivalent target for qualifying multinationals is 30%, this being 5% higher than the target in the generic code and similar to the new property sector charter .

The ICT charter, the statement says, “features a target of 5% net profit after tax to be spent on enterprise development initiatives aimed at growing and developing black-owned ICT enterprises”. The target for the generic codes is 3% net profit after tax.

The gazette also states that a spend of 1.5% net profit after tax is the target on socio-economic development initiatives, as distinct from 1% net profit after tax in the standard BBBEE code.

Communications minister, Dina Pule, will work towards establishing an ICT charter council within the framework of the much troubled charter, she said separately, to monitor the implementation of both the charter and the new BBBEE code for the ICT industry.


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DTI publishes property industry BBBEE Code regulations

By gazette, Trade and Industry Minister Rob Davies has regulated for black empowerment in the property sector; the department of trade and industry (DTI) having published the Property Sector Code in terms of the Broad-Based Black Economic Empowerment (BBBEE) Act aimed at economic transformation and “meaningful participation of black people, including women, the youth and people with disabilities”.

Minister Davies said in an accompanying statement as the gazette was published that the purpose was to “promote property development and investment in under-resourced areas, which enhances basic infrastructure, encourages investment and supports micro and small enterprises”.

Having much in common with DTI’s generic BBBEE code, the Property Sector Code introduces an eighth element of the scorecard called “economic development”, which the minister said has two measurement categories. “The first one is the commitment by the entities that deal in property development to invest at least 10% of their yearly property development investments in under-resourced areas. This is a transformational infrastructure commitment with the purpose of stimulating investment in those areas, reducing service inequalities and to create economic opportunities in those areas,” the minister said.

The second was the measurement of commitment by entities in the property sector to dispose of 35% of their assets to black-owned enterprises that had a BBBEE status of level 1 to level 3 in terms of the regulations, minister Davies said, meaning, as his statement added, that such “ were given the opportunity to own and trade in assets”.

Also, a difference is apparent in that the threshold for exemption from compliance for estate agents had been reduced to R2.5m of yearly turnover and not R5m as laid down in the standard BBBEE code.

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No labour dispensation for SEZs, says DTI

In a media release, the director-general of the department of trade and industry (DTI), Lionel October said labour laws will not be relaxed in the new arrangements for accelerating industrial development through special economic zones.

He was addressing organised labour at the Special Economic Zones Bill public hearings held by the department in Pretoria, yesterday.

Whilst government needs the full support from organised labour and business for the proposed special economic zones to work effectively, he said, “It is not in our best interests to deregulate labour laws in order to attract foreign investors and therefore exploit our workers.”

The timing of the remark would appear that pressure has come from organised labour to say something to the working force as a result of the introduction by President Zuma of special economic zones (SEZs) and their introduction into Parliament by October and the DTI.

October also said in his media release that government needs a regulated labour market to remain competitive and raise living standards for workers.

He went on to say, “The model of special economic zones that the government is pursuing shifts away from competing on the basis of cheap labour to competing on the basis of the quality of services and support measures provided in the zones and their host regions.”

DTI concluded that the challenge as they see it is to develop a comprehensive package of support measures that will be adequate to “attract desired investments but also assist the country to master the desired industrial capabilities”.

Public hearings are shortly to take place members involving the public, organised labour and business the SEZ Bill and government’s policy in this regard. The stated purpose of the Bill being to “accelerate of industrial development and create jobs through the creation of new industrial hubs in under-developed areas and industrial decentralisation from traditional zones by building targeted areas.”

The Bill, gazetted by the minister of trade and industry Dr Rob Davies last month, will be tabled once public hearings conducted by the DTI have taken place

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New BEE Code targets

The trade and industry department has published a gazetted notice announcing new targets for the Codes of Good Practice, which are published in terms of the Broad-Based Black Economic Empowerment (BBBEE) Act of 2003.

The Codes were first published in 2007 and were designed to provide principles and guidelines, government says, that will facilitate and accelerate the implementation of broad-based BEE “in a meaningful and sustainable manner”

The Codes also state the timeframes within which those targets must be attained.

According to the notice, the 0-6 year targets came into effect on 9 February 2012.

The new targets apply to those entities whose measurement date falls after 9 February 2012.

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