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29 March 2007

Mr Hans Jeppson, State Secretary for Trade of Sweden
Your Excellency, Mr Anders Mollander
Ambassador of Sweden to South Africa
Officials from the Governments of South Africa and Sweden who are present here today
Business leaders from South Africa and Sweden who are participating in this event
Ladies and gentlemen

Sweden has a very special place in the historical memory of South Africa. Swedish solidarity with our struggle for liberation made a very significant contribution to the eventual triumph of non-racialism and democracy in this country. As a result, we have a very powerful and very solid people to people relationship.

We are participating today in an event which we believe can contribute to one of the objectives our two countries have each defined since 1994, namely, to translate those ties of solidarity and our strong bonds of people to people relations into growing mutually beneficial economic interaction between our two countries. Sweden is of course a member of the European Union (EU) and as such the basic trade framework between us is set by the Trade Development and Co-operation Agreement (TDCA) in force between South Africa and the European Union, but while the TDCA provides the basic framework, the kind of relationship which I think we need to aspire towards can perhaps be described as EU plus (+). That is to say that from our point of view, we look to Sweden as a particularly significant and strategic member of the European Union with whom we would seek to build a stronger and deeper relationship than with the European Union as a whole. This requires of us that we work energetically at the bilateral level to complement and enhance the basic EU framework.

Mr State Secretary, Ambassador, ladies and gentlemen, if we look at the gross trade statistics, we see a welcome and pleasing increase in our two way trade in recent years. Between 2004 and 2005, our trade increased by 21% in nominal terms and between 2005 and 2006, it increased by a further 37%. However, these increases have taken place off a relatively low base and our two countries are ranked relatively low down the list of individual trading partners. For example in 2006, Sweden was ranked 26th as a destination for South African exports, below seven other EU member counties. As a source of imports, Sweden was ranked 18th, behind five other EU member countries. The balance of our two way trade favours Sweden and the pattern of our trade is typical of that between developed and developing countries in that 41% of our exports to Sweden are accounted for by base metals with a smaller scattering of value added products such as machinery and vehicles. Our imports by contrast from Sweden are overwhelmingly value added products, machinery, mechanical appliances, vehicles and aircraft, chemical products, optical photographic products and the like.

In terms of investment, recent years have seen significant investments by Swedish companies in the manufacturing sector in South Africa in the metals, machinery, chemicals, rubber and related sectors, with Swedish investments of over R700 million in 2005 bringing the total of Swedish investment to around about R1 billion.

In the Bi-National Commission which has been operating between our two countries since 2000, we have identified the need for a series of practical facilitative actions to create conditions for a mutually beneficial expansion of economic relations between our two countries. We welcome the fact that Sweden has expressed an interest in assisting Southern African countries in trade related capacity building initiatives and we are hoping in the near future to be able to submit concrete proposals to the Swedish embassy based on consultations which we have been undertaking at the level of the Southern African Development Community (SADC) and the Southern African Customs Union (SACU) secretariats.

We have also agreed to create an internet portal which can link up potential South African exporters with the Open Trade Gate Sweden, the Swedish one stop information centre to potential exporters. In this context we welcome very much this initiative today as well as the event with women entrepreneurs which took place yesterday.

Mr State Secretary, Ambassador, we appreciate very much the fact that you have taken the trouble to organise an event in South Africa which can help make South African businesses much more aware of the opportunities that exist for them in relations with Sweden.

This event is taking place at a time when South Africa is better placed than it has been at any time in the past 30 years or so to benefit from opportunities in the external economic arena. We are in the midst of an economic growth surge which is higher and has been sustained over a longer time period than at any moment in the past 30 years. Economic growth over the last few years has been consistently in excess of 4,5% and is projected to accelerate to 5,4% by the year 2009. However, we recognise that this is insufficient to make a decisive inroad into the struggle of poverty and unemployment and accordingly our Accelerated and Shared Growth Initiative for South Africa (AsgiSA) has been formulated with the objective of raising the growth rate to an average of around 6% by 2014 and also by ensuring that the growth has a more shared content. One of the central pillars of the AsgiSA programme is an infrastructure investment programme valued at over R300 billion which will address infrastructure backlogs and reduce the cost of doing business in South Africa.

We will also as you are well aware, be hosting the 2010 FIFA Soccer World Cup. Significant infrastructure development related to that event is already underway including stadium building, public transport programmes, improvements in Information and Communication Technology (ICT) and in the overall tourism infrastructure. We believe therefore that we have a solid basis domestically on which to expand mutually beneficial relations with partners in the outside world. The Trade Development and Co-operation Agreement which we have with the European Union is currently undergoing review. We have an understanding with the European Union that this process should be harmonised with the ongoing Economic Partnership Agreement negotiations with African, Caribbean and Pacific Group of States (ACP) regions and particularly the process ongoing in the SADC negotiating configuration. Within that context we have called for a harmonisation of our terms of access into the EU market as a contribution towards ongoing processes of regional integration in Southern Africa. We know that there are sensitivities within the EU in this regard but we also know that we can count on the support of countries like Sweden in pursuit of a generous development orientated outcome to these negotiations.

We are also meeting at a time when critical decisions will need to be taken if the World Trade Organisations (WTO) Doha Round is to move forward. While all of us are actively involved in these processes, it is no secret that a successful conclusion to the Doha negotiations will depend to a very large extent on the development of political will in the major advanced industrialised trading blocs to sustain offers that can give real developmental context to a WTO agreement. Again the eyes of the developing world will be on countries like Sweden to play an active and leadership role in discussions on these issues within the EU.

Mr State Secretary, Ambassador, ladies and gentlemen, as I have already indicated, we regard today's event as an important contribution by Sweden towards facilitating an enlarged mutually beneficial economic interaction between our two countries. I hope and trust that the business leaders that are present here today will find the presentations useful and informative. More than that though, we look forward to them following up on the information that they are given here today and perhaps particularly, the Open Trade Gate Sweden with concrete actions which we will be reflected in constant steady improvements in the trade statistics. Let me assure you Mr State Secretary, Mr Ambassador, that our department and ministry also have an open door with regard to anything that we can do to facilitate these processes.

I thank you for your attention and wish you well with the rest of the event.
Thank you very much.

Issued by: Department of Trade and Industry
29 March 2007
Source: Department of Trade and Industry (http://www.dti.gov.za)