Trade ties with South Africa get a boost

Doris Leuthard and South African Minister of Trade and Industry Mandisi Mpahlwa Keystone

Economics Minister Doris Leuthard and South African Trade and Industry Minister Mandisi Mpahlwa have launched a "Joint Economic Committee" in Bern.

The Swiss-South African venture was set in motion on Thursday as part of Mpahlwa’s two-day official visit to the Swiss capital.

“This is a platform that will help us to meet on a regular basis our South African partners – representatives from not only the government but also the business community,” Monika Rühl Burzi, head of bilateral economic relations at the State Secretariat for Economic Affairs (Seco), told swissinfo.

The committee was proposed during Leuthard’s trip to South Africa in May 2007 and was expressly mentioned in the memorandum of understanding on strengthening mutual cooperation the two countries.

This memorandum was signed by Foreign Minister Micheline Calmy-Rey and South African Foreign Minister Nkosazana Dlamini Zuma on March 8.

Rühl said the committee would meet once a year, alternating between Switzerland and South Africa. The first meeting was in Zurich on Wednesday.

“This will enable us to discuss issues that are of concern in the context of our bilateral economic relations and to our respective business communities,” she said.

“Issues that are of concern to our companies, not only in South Africa but also generally, include the respect of intellectual property rights and their enforcement and the issue of bureaucracy. Our companies are interested in seeing leaner procedures so they can do business in an easier fashion.”

Economic boost

In addition to this first session, the two ministers are scheduled to hold a working meeting. The agenda for this meeting will include the continuation of the positive dialogue initiated at the South African Mission and a further examination of important economic dossiers.

Issues relating to the World Trade Organization Doha Round of trade talks and to the Efta-Sacu (European Free Trade Association and the Southern African Customs Union) free-trade agreement will also be discussed.

The two countries’ economic relationship was given a boost on May 1 when the EFTA-SACU agreement came into effect.

“We believe this is a very important tool that will further open up our respective markets,” Rühl said.

Southern hub

South Africa is by far the largest export market on the African continent for Switzerland, she added.

With a bilateral trade volume of around SFr1.85 billion ($1.75 billion) for 2007, South Africa holds a mid-table position among Switzerland’s trade partners.

In 2007 South African exports amounted to SFr1 billion, while Swiss exports totalled SFr805 billion.

As of the end of 2006 Swiss direct investment was valued at nearly SFr5 billion.

According to statistics from the South African Reserve Bank, during the same time Switzerland ranked fifth on the list of the most-important foreign investors in South Africa.

“We want to strengthen our bilateral economic relations with South Africa because we believe in the South African market but also because we believe in South Africa playing the role of a hub for the whole southern region,” Rühl explained.

swissinfo, Thomas Stephens

Key facts

Swiss exports to South Africa (2007): SFr805 million. Mainly pharmaceutical products, machinery, medical instruments.
Imports from South Africa (2007): SFr1 billion. Precious stones, including diamonds, precious metals, jewellery and agricultural products.
Direct investment (2006): SFr5 billion.
Switzerland is among the top five foreign investors.

Switzerland and South Africa

The economic interests of Swiss businesses in South Africa go back to the first half of the 20th century. In 1921 the Bally shoe factory started manufacturing operations in South Africa. More companies followed. In 1988, 17,000 people were working for Swiss firms in South Africa.

In the 1950s South Africa became one of the most popular destinations for Swiss emigrants on the African continent. By the end of the 19th century Switzerland had opened consulates in Pretoria and Johannesburg and in 1916 one in Cape Town. In 1960 it upgraded its delegation in Pretoria to an embassy.

In the 1970s there was growing criticism of Switzerland’s relations with the apartheid regime in South Africa.

In the mid-1980s the Swiss government, under pressure from public opinion, the United Nations and the African states, played a more active role in the process of democratic change in South Africa.