SA and New Zealand scrum down to business
NEW ZEALAND's economic revolution left the business community of old in tatters. A drastic tariff reduction, coupled with a liberalisation of the foreign exchange system, has forced corporate New Zealand to make its mark in the export market.
Corporations have done this by developing niche export markets in areas like agri-processing, telecommunications and education.
Some of these exporters will accompany New Zealand International Trade Minister Lockwood Smith on the first full-scale trade mission to SA since the lifting of sanctions.
Smith said in an interview that the trade mission reflected the improved trade links between the two countries, whose encounters on the rugby field are legendary but whose commercial links are only now developing.
In 1993, the year New Zealand eased sanctions against SA, exports to SA were valued at just over NZ$37-million. In the 12 months until the end of June this year, they had almost doubled to NZ$71-million.
Imports of SA goods to New Zealand showed a similar trend, rising from NZ$36-million in 1993 to NZ$64-million.
New Zealand's exports to SA continue to be dominated by agricultural goods. In the 12 months to end-June this year, dairy products made up 24%; machinery, much of it agricultural, 15%; meat 6%, fruit and vegetables 7%, fish 5%, and other primary products 13%. Domestic electrical equipment was the highest non-agricultural commodity accounting for 12% of all exports.
However, Smith expects the trend of future trading patterns to move away from its high reliance on primary goods.
Agricultural technology, agricultural machinery and hi-tech developments in primary industry were likely to be the main growth points, he said.
"I think SA possibly fell behind international developments during the period when sanctions were in place - and I think we've got an opportunity because New Zealand is very advanced technically."
New Zealand businesses would ensure they had tied up the necessary patents and intellectual properties such as plant variety rights, he said.
Sixteen business executives will accompany Smith. The private sector is led by Bill Gallagher of the Gallagher Group, which has a significant market share of the electronic security fencing market in SA.
The mission is made up mostly of companies selling agricultural products and technology, as well as telecommunications and other technical equipment.
Smith says he will be holding a series of meetings with his agriculture, forestry and trade counterparts in the SA government. "As major agricultural exporters, we both have a common interest in breaking down barriers to free trade in farm products. I'll be using my visit to explore further avenues for co-operation on trade issues."
New Zealand is the main sponsor of SA's bid to join the Cairns Group of leading agricultural producers. The Cairns Group is seeking to place agricultural goods on the same level as other goods at the World Trade Organisation.
"Having SA aboard would strengthen the Cairns Group ahead of important World Trade Organisation negotiations on the liberalisation of agricultural trade in 1999," says Smith.