First Special Economic Zones on the way

manufacturing-gear-wheelsThe roll-out of special economic zones is under way, with the first two in KwaZulu-Natal and the Free State to be proclaimed shortly, Trade and Industry Minister Rob Davies said on Wednesday.

The Dube trade port and the Tshiame industrial development zone in Harrismith would both be transformed into special economic zones as soon as the regulatory framework had been established, which the minister said would take place within the next 100 days.

The regulations and guidelines would be finalised. The special economics zones board would be established, as would a one-stop-shop for fast-tracked support to investors.

The Dube trade port industrial development zone will specialise in high-value, niche agricultural and horticultural products, as well as manufacturing and value-addition for the automotive, electronics and clothing industries.

The Tshiame industrial development zone at Maluti-a-Phofung near Harrismith in the Free State will focus on automotive, clothing and agro-processing activities.

The Department of Trade and Industry is evaluating the feasibility of special economic zones focusing on the beneficiation and value-addition of platinum in Limpopo and North West. These zones would be used to encourage investors in beneficiation to locate their plants close to the mineral deposits.

Opportunities to partner with international producers of fuel cells are available, and have the potential for South Africa to become an established hub for the production of fuel-cell components. The Dti opines that this would be a very significant development because fuel cells are new technology used for back-up power generation in telecommunication masts, base-load power generation in rural areas, and fuel-cell passenger vehicles. The technology is fast becoming the subject of intense international competition for investment and is also a technology well suited to South Africa’s comparative advantage in platinum mineral resources.

The department is also assessing the feasibility of a solar industrial development zone in Upington in the Northern Cape.

The Saldanha Bay industrial development zone was well positioned to become a hub for oil, gas and marine repair, engineering and logistics. An application to operate as a Customs Control Area to service the West and East African offshore oil and gas industry is being finalised. To date 18 companies, nine local and nine foreign, have signed nonbinding expressions of interest.

The Coega, Richards Bay and East London industrial development zones had together generated R3.4bn in investments and created more than 67,000 direct and indirect jobs. A number of new investments worth several billion rand were also under negotiation. Source: BDlive.co.za

DTI Destroys ‘Unsafe’ Goods Worth R8 Million

NRCSMore than 300 000 of non-complying products valued at R8-million were destroyed at the third destruction of goods function conducted today in Born Accord, Pretoria. The goods were seized during the National Regulator for Compulsory Specifications (NCRS) raids and a significant percentage of the products were also intercepted at the ports of entry including sea ports and inland ports.

Addressing stakeholders at the event, the Minister of Trade and Industry, Dr Rob Davies said it was crucial to have technical regulations and compulsory specifications for goods in order to prevent sub-standard, unsafe, and harmful products into the South African market.

“The goods are not only destroyed to defend our consumers against sub-standard products, but also the South African producers against unfair competition from those who either produce the same products or more typically import from all sort of borders,’” he said.

Minister Davies mentioned the recent six weeks blitz conducted by NCRS in Cape Town, Durban and City Deep were 0.25% of all containers entering the country were inspected and close to R8-million worth of non-compliant products were detected.

Davies said to date, approximately R153-million worth of non-compliant and unsafe products were seized and removed from the market.

“As government, we are therefore committed to locking out non-compliant products especially since most of these products are being sold to poor people who often do not yet have access to the necessary information on safety standards and their rights in this regard,” added Davies.

Davies urged stakeholders to work together with the NCRS and the National Consumer Commission to ensure the safety of consumers and also to protect jobs.

The non-complying products which were destroyed range from steam irons, plugs, respirators, adaptors, paraffin stoves, swimming aids, chemicals, compact fluorescent lamps, incandescent lamps for vehicles, circuit breakers, adaptors, power supply, cell phone chargers, paraffin stoves, plastic carriers, digital photo frames, television sets, electric kettles, hair clippers, motor cycle helmets, child restraints, tryes, seals, microphones, DVD players, extension cords to massagers. Source: DTI and NRCS

Government SEZ Bill will support economic growth and opportunities

sez.jpgThe Special Economic Zones (SEZ) Bill 2013, according to the government will support a broader-based industrialisation growth part and be a significant milestone in pursuit of the aspirations of the National Development Plan (NDP).

Rob Davies, Department of Trade and Industry Minister says, “The bill aims to support a balanced regional industrial growth path, along with the development of more competitive and productive regional economies.”

SEZs are defined as geographically designated areas of a country set aside for specifically targeted economic activities, supported through special arrangements and systems that are often different from those that apply to the rest of the country.

Says Davies, “The aim of the SEZ Bill seeks to boost private investment (domestic and foreign) to labour-intensive areas to increase job creation, competitiveness, skills and technology transfer along with exports of beneficiated products.”

The Bill introduces a variation of SEZ’s to cater for the various spheres of government at local, provincial and national level.

It also provides for the designation of the following types of SEZs:

  • Free Ports: duty-free areas adjacent to a port of entry where imported goods may be unloaded for value-adding activities, repackaging, storage and subsequent re-export, subject to special customs procedures.
  • Free Trade Zones: a duty-free area offering storage and distribution facilities for value adding activities within the SEZ.
  • Industrial Development Zone: a purpose-built industrial estate that leverages domestic and foreign fixed direct investment in value-added and export-oriented manufacturing industries and services. (To date there are five Industrial Development Zones (IDZs) – Coega, East London, Richards Bay, OR Tambo and Saldanha Bay).
  • Sector Development / Specialised Zones: a zone focused on the development of a specific sector or industry through the facilitation of general or specific industrial infrastructure, incentives, technical and business services primarily for the export market.

Source: Transport World Africa

SACU’s Choice – ‘Common policy or irrelevance’

imagesCA31PQJGThe Minister of Trade and Industry, Dr Rob Davies briefed the Parliamentary Portfolio Committee on Trade and Industry regarding the progress on the implementation of the five-point plan in Cape Town. This is a work programme which was approved by the 2nd Southern Africa Customs Union (SACU) Summit convened by President Zuma in 2011 premised on the following pillars;

  1. Work programme on cross-border industrial development;
  2. Trade facilitation;
  3. Development of SACU institutions;
  4. Unified engagement in trade negotiations and
  5. The review of the revenue sharing arrangement.

The five-point plan emerged from realization by SACU Member States of a need to move SACU beyond an arrangement held together only by the common external tariffs and the revenue sharing arrangement to an integration project that promotes real economy development in the region.

Minister Davies noted that progress on the implementation of pillars of the five- point plan is uneven. SACU has registered good progress on trade facilitation and there is greater unity of purpose in negotiations with third parties (Economic Partnership Agreement (EPA), SACU-India and Tripartite Free Trade Area).

However, there is limited progress on the review of the revenue sharing arrangement and hence lack of adequate financial support for the implementation of cross-border industrial and infrastructure development projects. The SACU revenue pool is raised by South Africa from customs and excise duties. Mr Davies told MPs that in 2013-14 the total disbursement from the revenue pool would be about R70bn of which the BLNS countries would receive about R48bn. There is also lack of progress on the development of SACU institutions as a result of divergences in policy perspectives and priorities of Member States.

Enabling provisions provide for the establishment of National Bodies and a SACU Tariff Board. The SACU Tariff Board will make recommendations to Council on tariffs and trade remedies. Davies added that, until these institutions are established, functions are delegated to the International Trade Administration Commission (ITAC) in SA.

The minister warned that the lack of agreed policies would hinder effective decision-making on regional integration and industrialisation, which had made little progress since the 2011 summit convened by President Jacob Zuma. South Africa believes SACU needs to move “firmly towards a deeper development and integration”.

Minister Davies said SACU risked becoming “increasingly irrelevant” as an institution if it did not develop beyond operating a common external tariff, and a “highly redistributive” revenue-sharing arrangement. The lack of progress in developing new SACU institutions was primarily due to policy and priority differences among members. “Against this background South Africa needs to reassess how best to advance development and integration in SACU.”

Among the disagreements on tariff setting between South Africa and its neighbours highlighted by Mr Davies, was that South Africa saw tariffs as a tool of industrial policy while they regarded them as a means of raising revenue. For example, the other Sacu members wanted to include the revenue “lost” on import tariff rebates offered by South Africa into the revenue pool.

The pool provides these countries with a major source of their national budget. Rebates were seen as revenue foregone for which additional compensation should be sought. South Africa, on the other hand, argues that the rebates (for example on automotive imports) are part of its total tariff package and serve to attract investment and boost imports and therefore, contribute to expanding the revenue pool, not diminishing it.

He emphasised the development of a common approach on trade and industrial policy as the prerequisite for establishing effective SACU institutions in future.

He highlighted that a discussion on appropriate decision-making procedures on sensitive trade and industry matters that takes into account SACU-wide impacts is required. Source: The Department of Trade & Industry, and BD Live.