3
rdTrade Policy Review of SACU
November 4th, 2009
Statement by the Republic of Korea
Thank you, Mr. Chairman.
1. Opening Remarks
I would like to join others in expressing a cordial welcome to each of the five delegations of SACU for their third trade policy review.
My appreciation especially goes to Dr. Malon Lindeque from Namibia for his detailed and informative presentation on the economic achievements and current status of the SACU member states, as well as additional clarity on the new SACU agreement of 2002.
My thanks also goes to Amb. AGAH for his insightful comments, as well as the Secretariat for its thorough report.
2. General Assessment of SACU’s Achievements since 2003
Mr. Chairman, just like all the previous speakers, I would like to note and extend my appreciations for the achievements of the SACU states during the past 6 years.
Collectively, during the period under examination the SACU states expanded at an average annual rate of roughly 4%, and in the process further increased the use of trade as a vehicle for progress: the numbers state that the ratio of aggregate trade in goods and services as a percentage of GDP increased steadily from 56.5% in 2002 to 66.6% in 2007. While the positive balance in trade has given way to a deficit during this period, we note that this outcome was partly due to increased demand for machinery products by the part of South Africa. Given that capital investments are essential, necessary, and a pre-requisite for further economic growth, we are certain that these investments will ‘pay-off’ by assisting SACU states to accrue even greater prosperity in the future.
With regards to SACU’s trade with the world, we note that the lion’s share of SACU’s trade has traditionally been conducted with the EC and the US under the preference programs provided by them.
3. Korea-SACU Bilateral Relations/FTA
1
However, we also note that in recent years SACU’s trade with Asian countries including Korea is on the rise, and we welcome this new trend. We have always held the view that there was much room for greater South-South cooperation between the two regions, and clearly the recent figures validate this view. As such, we would like to propose to capitalize on this new found momentum by engaging in further intensive discussions with a view to establishing a new, mutually beneficial trading regime linking the two regions. In this context, we welcome the understandings achieved during the fourth Korea-South Africa Policy Dialogue, and hope that it will form the basis for future progress in this area.
4. Points for Further Consideration
Mr. Chairman, while reviewing the progress achieved by the SACU states during the period under review, my delegation noted some areas in which further considerations for further improvement might be necessary. I would like to take this opportunity to point out two items for consideration by my SACU colleagues.
We note that the inflow of FDI into SACU remains low vis-à-vis the global standard, and is concentrated in a number of sectors such as mining, clothing, and a couple of services. Given that FDI is an important source for sustained economic growth, I believe the membership might benefit from learning what specific measures are on the drawing board, either individually or as SACU as a whole, to attract more FDI into the SACU region.
Also, through the Secretariat report as well as various other sources, my delegation notes the challenges SACU members face in their fight against the HIV/AIDS pandemic, and the overall high unemployment against the backdrop of insufficient educational and economic infrastructure. Recalling that a healthy and well-educated labor force is indispensable and imperative for greater economic growth, it is clear there is a need for greater government spending in this area. However, at the same time it is also clear that greater government spending generally yields results in the long-run, while increased government expenditure could de-stabilize the government’s balances in the near future. Faced with such difficult choices, how are choices being made by the SACU states? It will be worthwhile to discuss this issue during the second session on Friday.
5. Concluding Remarks
Mr. Chairman, two weeks ago my delegation submitted several advanced written questions to the SACU member states. While thanking SACU for the answers provided this morning, I would like to inform them that some additional questions have been received from capital, and will be delivered electronically through the Secretariat after this meeting. We hope preliminary answers on to them could be provided during the second day.
2
Mr. Chairman, in closing, I would like to once again extend the best wishes of this delegation to each delegation of the SACU states, and hope that this review will serve to be a valuable opportunity for the SACU officials to take stock of the successes of their trade policy during the past 6 years, and take stock of what needs to be done for the future.
Thank you, Mr. Chairman.
***
3
