Premier

The  Department of Trade and Industry and Competition (the DTIC), through Trade and Investment South Africa (TISA), is mandated to grow the export base and increase exports of South African value-added products and services. Another key stakeholder concerning international trade is the International Trade Administration Commission of South Africa (ITAC) whose purpose is to foster economic growth and development to raise incomes and promote investment and employment in South Africa and within the Common Customs Union Area by establishing an efficient and effective system for the administration of international trade, subject to the International Trade Administration Act and the Southern African Customs Union (SACU) Agreement. The Commission's core functions are:

• customs tariff investigations;
• trade remedies;
• and import and export control.

The key strategy which underpins trade policy is the Integrated National Export Strategy (INES) or “Export 2030” which reviewed the progress of South Africa’s export sector and identified priorities for enhanced export performance. The INES covers a basket of interventions at the macro and micro levels of export development and promotion. The strategies and principles of the INES extend to the activities of the relevant economic agents from the public sector (all departments, at all three spheres of government, State-owned enterprises and other government agencies) as well as the private sector.

The approach the Westen Cape Government, therefore, has concerning foreign trade is underpinned by the INES as the official export strategy document for the country along with building strong partnerships with DTIC, TISA as well as ITAC. International agreements are the responsibility of the National Executive and any international trade agreement under which the Western Cape Province trades are agreements that were entered into by the Republic of South Africa, as represented by the national executive as per the relevant constitutional mandate. Also, due to South Africa being a member of the Southern African Customs Union (SACU) with a common external tariff, any agreement related to import tariffs are negotiated by SACU as a bloc. In certain instances, however, agreements of cooperation, or memoranda of understanding (MOUs), related inter alia to trade and development are entered into by sub-national institutions with foreign counterparts.

Provincial Government, therefore, does not have a Western Cape Trade policy as this is mandated to the National Minister of Trade and Industry. The Province can develop a subsequent trade/export strategy but not necessarily a policy as the fundamentals of any trade policy is underpinned by the relevant National tariff and trade policy positions.

The Western Cape Government holds responsibility for the promotion of trade and investment in the province, this part of the mandate is executed by the Western Cape Investment and Trade Promotion Agency (Wesgro), as per the Wesgro Act (1996). This act makes provision for the establishment, appointment, powers and functions of the Western Cape Investment and Trade Promotion Agency to promote and support the economic growth and development of the province etc. The Department of Economic Development and Tourism (DEDAT) along with Wesgro is in the process of developing an export strategy which should be completed in the 2020/2021 financial year. The relationship between the export strategy and the international relations strategy is key.

The Western Cape Government’s international trade strategy takes direction from the national government and national policy. In line with this, the Western Cape Government’s international export promotion strategy includes a strong focus on boosting trade with the rest of Africa and supporting the development of regional value chains on the continent.

The Western Cape Government’s international engagements are underpinned by the International Relations Strategy (IRS) that was adopted in 2013. The IRS identified the following key strategic objectives it aims to achieve through its interaction with foreign stakeholders namely:

1. Create an enabling environment to facilitate trade and attract strategic investment growth and tourism to the Western Cape;
2. Develop skills and best practices through knowledge sharing by cooperative multi-dimensional exchanges with emerging and developed regions; and
3. Improve environmental resilience and adaptation to climate change and increase sustainability in the Western Cape through strategic international partnerships.

The IRS furthermore identify key geographical areas that should be prioritised for international engagements:

1. Rest of Africa;
2. BRIC countries;
3. Regional Leaders’ Forum member states[1];
4. Western Cape’s Traditional markets;
5. Developing South, including the Next 11 countries[2]; and
6. Rest of the world.

The IRS should be read in conjunction with the emerging priorities of the current administration, including but not limited to the Vision Inspired Priorities (VIPs).

2. This response will, therefore, list (1) the international trade agreements, under which the Western Cape Government works to promote trade, and (2) any other cooperation agreements or MOUs of symbolic nature which the Western Cape Government or its international trade promotion agency have entered into. This includes the following relevant agreements:

1. International Trade Agreements

1. 1.1 Southern African Customs Union (SACU)

1. Member states Botswana, Eswatini, Lesotho, Namibia, and South Africa.
2. Nature: Customs Union. Duty-free movement of goods within SACU, a common external tariff applied on goods entering any of the countries from outside SACU.
3. Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, plays a role in ensuring that the benefits of this agreement are maximised for economic development. This is done through the facilitation of exports from the Western Cape to SACU member states and promotion of integrated regional market access and value chain opportunities to prospective foreign investors. Wesgro does this using:

• International trade missions
• Outward foreign direct investment promotion into the rest of Africa
• Export training and international mentorship
• Business seminars, knowledge sharing and networking
• Use of Decision Support Model (DSM) software to support companies in finding realistic export opportunities
• Inward buying missions and outward selling missions
• Advocacy and specialised advisory services
• Access to strategic networks
• Marketing support for the marketing of value-added goods and services
• International investment promotion aimed at bringing foreign direct investment, not only to the Western Cape but also to the country and the continent.

1. 1.2 Southern African Development Community (SADC)

1. Member states: Botswana, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Tanzania, Zambia, Zimbabwe (Angola is in process of acceding, DRC and Comoros have not acceded to Protocol on Trade in Goods.)
2. Nature: Free Trade Agreement for trade in goods.  
3. Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, plays a role in ensuring that the benefits of this agreement are maximised for economic development. This is done through the facilitation of exports from the Western Cape to SADC member states and the promotion of integrated regional market access and value chain opportunities to prospective investors. Wesgro does this using:

• International trade missions
• Outward foreign direct investment promotion into the rest of Africa
• Export training and international mentorship
• Business seminars, knowledge sharing and networking
• Use of Decision Support Model (DSM) software to support companies in finding realistic export opportunities
• Inward buying missions and outward selling missions
• Advocacy and specialised advisory services
• Access to strategic networks
• Marketing support for the marketing of value-added goods and services
• International investment promotion aimed at bringing foreign direct investment, not only to the Western Cape but also to the country and the continent.

The Western Cape Government’s international trade strategy takes direction from the national government and national policy. In line with this, the Western Cape Government’s international export promotion strategy includes a strong focus on boosting trade with the rest of Africa and supporting the development of regional value chains on the continent.

1. 1.3 Southern African Development Community (SADC): Protocol on Trade in Services (agreement not in force)

1. Member states: Angola, Botswana, the Democratic Republic of the Congo, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Tanzania, Zambia, Zimbabwe (Excluding Comoros)
2. Nature: Services trade liberalization. Six services sectors initially (communication, construction, energy, finance, transport, tourism).
3. Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, will play a role in ensuring that the benefits of this agreement are maximised for economic development once this agreement enters into force.

1. 1.4 SACU – European Free Trade Association (EFTA) Free Trade Agreement:
2. a. Member states SACU states, Iceland, Switzerland, Liechtenstein and Norway.
3. b. Nature: Free Trade Agreement. Tariff reductions on selected goods, including industrial goods and processed agricultural products (including fish and other marine products). Bilateral agreements with individual EFTA states govern trade in basic agricultural goods. c. Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, play a role in ensuring that the benefits of this agreement are maximised for economic development. This is done through the facilitation of exports from the Western Cape to EFTA member states, and promotion of competitive international market access opportunities to prospective foreign investors. Wesgro does this using:

• International trade missions
• Export training and international mentorship
• Business seminars, knowledge sharing and networking
• Use of Decision Support Model (DSM) software to support companies in finding realistic export opportunities
• Inward buying missions and outward selling missions
• Advocacy and specialised advisory services
• Access to strategic networks
• Marketing support for the marketing of value-added goods and services
• International investment promotion aimed at bringing foreign direct investment, not only to the Western Cape but also to the country and the continent.

Europe is the Western Cape’s second-largest export market after Africa. The Western Cape’s export promotion strategy includes maintaining and expanding its traditional export market in Europe, while also diversifying to new markets. The SACU-EFTA FTA provides competitive advantages for South African exports in the EFTA countries and as such Wesgro works to ensure that exporters maximise export opportunities to the EFTA markets under these agreements.

1. 5. SADC – European Union (EU) Economic Partnership Agreement (EPA)

1. Member state: SACU states plus Mozambique, European Union.
2. Nature: Economic Partnership Agreement. Replaces the trade chapter in the Trade Development and Cooperation Agreement (TDCA). Reciprocal, asymmetrical trade agreement.
3. Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, play a role in ensuring that the benefits of this agreement are maximised for economic development. This is done through the facilitation of exports from the Western Cape to EU member states, and promotion of competitive international market access opportunities to prospective foreign investors. Wesgro does this using:

• International trade missions
• Export training and international mentorship
• Business seminars, knowledge sharing and networking
• Use of Decision Support Model (DSM) software to support companies in finding realistic export opportunities
• Inward buying missions and outward selling missions
• Advocacy and specialised advisory services
• Access to strategic networks
• Marketing support for the marketing of value-added goods and services
• International investment promotion aimed at bringing foreign direct investment, not only to the Western Cape but also to the country and the continent.

Europe is the Western Cape’s second-largest export market after Africa. The Western Cape’s export promotion strategy includes maintaining and expanding its traditional export market in the EU, while also diversifying to new markets. The SADC –EU EPA provides competitive advantages for South African exports in the EU, and as such Wesgro works to ensure that exporters maximise export opportunities to the EU under the EPA. The same has relevance for the new EPA with the UK, once it enters into force.

1. 6. SACU – South Common Market (Mercosur) Preferential Trade Agreement 

a. Member state: SACU States and Argentina, Brazil, Paraguay, Uruguay.

b. Nature: Preferential trade agreement. Tariff reductions on selected goods, including approximately 1000 tariff lines on each side. 

c. Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, play a role in ensuring that the benefits of this agreement are maximised for economic development. This is done through the facilitation of exports from the Western Cape to Mercosur member states, and promotion of competitive international market access opportunities to prospective foreign investors. Wesgro does this using:

• International trade missions
• Export training and international mentorship
• Business seminars, knowledge sharing and networking
• Use of Decision Support Model (DSM) software to support companies in finding realistic export opportunities
• Inward buying missions and outward selling missions
• Advocacy and specialised advisory services
• Access to strategic networks
• Marketing support for the marketing of value-added goods and services
• International investment promotion aimed at bringing foreign direct investment, not only to the Western Cape but also to the country and the continent.

The Americas are the Western Cape’s third-largest export market. The Western Cape’s export promotion strategy includes maintaining and expanding its traditional export market in the United States of America, while also diversifying to new markets. The SACU- Mercosur PTA provides competitive advantages for certain South African exports in Mercosur, and as such Wesgro works to ensure that exporters maximise export opportunities to the Mercosur markets under the PTA, with a particular focus on Brazil.

1. 7. The African Continental Free Trade Area (AfCFTA)

a. Member states: All the member states of the African Union have signed except Eritrea. 30 countries have complied with their domestic requirements for ratification. The AfCFTA entered into force on 30 May 2019, however, the schedules to the agreement are still under negotiation.

b. Nature: Free Trade Agreement. Key objectives of the AfCFTA include creating a single market for goods and services and enhancing economic integration on the African Continent.  

c.Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, will play a role in ensuring that the benefits of this agreement are maximised for economic development once it is operational. The Western Cape Government’s international trade strategy takes direction from the national government and national policy. In line with this, the Western Cape Government’s international export promotion strategy includes a strong focus on boosting trade with the rest of Africa and supporting the development of regional value chains on the Continent.

0. 8. SADC-EAC-COMESA Tripartite FTA (TFTA)
1. Member states: Members of the SADC, East African Community, and the Common Market for Eastern and Southern Africa. The TFTA has not entered into force.
2. Nature: Free Trade Agreement. Initially trade in goods, with a second phase to cover trade in services and other trade-related areas.
3. Role of the provincial government and that of a foreign country and/ or investors: The implementation of this agreement is a national competence. The provincial government, through its tourism, trade and investment promotion agency, Wesgro, will play a role in ensuring that the benefits of this agreement are maximised for economic development once it is operational. The Western Cape Government’s international trade strategy takes direction from the national government and national policy. In line with this, the Western Cape Government’s international export promotion strategy includes a strong focus on boosting trade with the rest of Africa and supporting the development of regional value chains on the Continent.

2. Trade related Memorandum of Understandings – Western Cape (Wesgro)

1. 1. Wesgro and UK DIT: The objective of this Memorandum of Understanding (this Memorandum), is to establish a strategic partnership between the Participants in order to enhance the trade and investment relationship between the United Kingdom and the Western Cape and secure positive commercial outcomes. The partnership will ensure ongoing collaboration to maintain existing investments and facilitate the development of new trade and investment opportunities. The partnership will see both participants work to develop support services for UK and South African companies and promote business environment improvements. The participants will work together, and alongside other relevant departments and agencies, on a national and local level, to meet this objective and wider aims. In short: It's an MoU to promote collaboration between Wesgro and UK DIT to enhance trade and investment

1. 2. Swiss Import Promotion Programme (SIPPO): The objective of cooperation between SIPPO and Wesgro is (a) to advance the export promotion services of Wesgro to export ready companies, and (b) to equip these companies with improved access to European and other important target markets. To this end, SIPPO and Wesgro will provide a range of services to export ready companies within the areas of capacity building, networking, match making and market intelligence.

1. 3. Angola chamber of commerce CACIAAS - 2019: The purpose of this agreement is to establish the scope of cooperation and framework conditions under which Wesgro and CACIAAS will work within their mandates pursuant to the prevailing laws and regulations of their respective countries. The objective of the cooperation between CACIAAS and Wesgro is a) to advance the export promotion services of Wesgro towards export-ready companies, and b) to equip these companies with improved access to Angola. To this end, CACIAAS and Wesgro will provide a range of services to export-ready companies within the areas of capacity building, networking, matchmaking and market intelligence.

1. 4. Botswana Investment and Trace Centre (BITC) – 2016: Desiring to strengthen and to assist cooperation aimed at enhancement of investment activities between Parties, Desiring to design favourable conditions for sustainable growth of economic cooperation, Intending to develop direct contacts between business circles in the Republic of Botswana and the Western Cape Province in RSA.

3. Value of trade activities and investment

In response to the question, for the period from 2009/2010 financial year until the 2019/2020 financial year, the Western Cape Provincial Government allocated a total of  R523,8m towards trade and investment promotion through Wesgro, generating an estimated rand value for investment and exports of R 40,21bn , facilitating 14 254 job opportunities. Table 1 below provides a breakdown of the Investment and Trade Promotion figures for the financial periods requested.

TABLE 1: ESTIMATED RAND VALUE OF COMMITTED INVESTMENT PROJECTS (2009/10 TO 2019/20)

Also, for the period extending from 2009/10 to 2015/16, Wesgro reported on the number of companies assisted with exports number of outward missions completed (see Table 2). In 2016/17, Wesgro changed its strategy and started reporting on the outcomes of the interventions implemented. Table 3 below provides a breakdown of the companies supported by exports and the estimated economic impact of exports.

TABLE 2: BUSINESS TRAINED, SUPPORTED AND TAKEN ON OUTWARD MISSIONS  (2009/10  TO 2015/16)

TABLE 3: ESTIMATED ECONOMIC IMPACT OF EXPORTS (2016/17 TO 2019/20)

[1] The Western Cape is part of a multilateral grouping of provinces that include Quebec (Canada), Georgia (USA); São Paulo (Brazil); Upper Austria (Austria); Bavaria (Germany); and Shandong (China).