Tag: exports

SA Citrus exports to EU under threat

The European Union wants to stop some imports from South Africa, like citrus fruit, SA Ambassador to Belgium Mxolisi Nkosi said on Sunday.

“There is a trend of rising protectionism that the EU is using to threaten to block some of our exports, including citrus exports,” he said, during an unofficial meeting with South African diplomats at his home in Belgium’s capital, Brussels.

“We are concerned about this. We will speak of this at the meeting and see how we can find a solution.”

The South African delegation from the international relations department arrived in Brussels on Saturday ahead of bilateral talks and political engagement.

They are accompanying Minister Maite Nkoane-Mashabane, who is due to meet with several top European officials this week. The accompanying officials met with the ambassador on Sunday.

Nkosi said the citrus sector contributed around R6 billion to South Africa’s gross domestic product (GDP).   The rise in citrus production was mainly due to the increase in cultivation areas, packaging and transport improvements, and preferences for healthier food options.

But citrus harvesting and production in most of Europe continues to decline, particularly at this time of the year due to climate conditions.   About 40% of South Africa’s citrus exports go to the EU, making it one of the country’s most important markets. South Africa is the world’s biggest exporter of whole oranges and the largest shipper of grapefruit.

“This is a big business,” said Nkosi.

Citrus imports were halted after some shipments were found to have the citrus black spot (CBS) disease.

The spot is a fungal disease which affects the external appearance of the fruit.

In 1993, the EU declared CBS a phyto-sanitary measure, meaning it was placed on a trade watch-list at EU borders. If spotty fruit were found, the consignment would be impounded.

This reduced the proportion of citrus exports to the EU. Farmers are now spending substantial amounts to get rid of the spots.   The Citrus Growers’ Association of Southern Africa listed nine additional direct and indirect costs associated with the EU measure. These include more spraying, replanting earlier than necessary, added inspection costs, and storage costs for impounded fruit at European ports.

Export earnings account for about 80 to 90% of citrus growers’ revenue. The industry wants the phyto-sanitary measure withdrawn pending further research into black spot. Farmers believe the threat of citrus fruit being blacklisted could have disastrous effects on the sector.

The first case of CBS was recorded in 1929, and until recently the EU has not been too concerned about excluding spotty fruit.

Nkosi said the EU remained one of South Africa’s biggest trading partners, accounting for 24% of global exports.

He said the Eurozone financial crisis had significantly reduced demand for South African exports.

Despite its problems, Nkosi said the EU remained the second-largest economy in the world, accounting for 17% of the world’s GDP.

“Our relations with the EU go a long way,” he said.

“South Africa is the only African country with a partnership with the EU.”   However, Nkosi was concerned that EU development aid to South Africa would be significantly cut in the coming years.

“We need to be alive [to this], and the reality is the EU can no longer help us the way they used to,” he said.

Despite this, he said the EU would remain a strategic partner. – SAPA

China surpasses US as trading partner

In just five years, China surpassed the US as leading a trading partner in the world. With 124 countries considering China their largest trading partner and only 76 having that relationship with the US, the Asian country’s influence is on the rise.

In 2006, the US was the larger trading partner for 127 countries, while China dominated among 70. In 2011, the numbers reversed, with China dominating trade among 124 countries and the US being the top trade partner for only 76, the Associated Press reported. Some US allies even consider China their top trading partner, including Australia and South Korea.

The AP findings demonstrate China’s rapid ascent as a trade partner. As a result of its international relationships, the world’s most populous country is becoming more politically influential – and its rise won’t be ending anytime soon. China’s world output is forecasted to grow up to 8 percent a year over the next decade – a rate that surpasses all Western levels.

Trade with China was on average 12.4 percent of GDP for other countries – a rate that is higher than trade with the US has been in the past 30 years. Trade with China was only 3 percent of a country’s GDP in 2002, which demonstrates the surge that occurred in the last decade.

With rising trade influence, China is likely to also generate jobs, raise living standards and gain political power.

“The United States is a tiger with no power. Nobody can deny that China is the one now rising,” said Shin Cheol-soo, a South Korean businessman at the ENA Industry Co.

While the US is still the world’s largest importer and exports more expensive and high-quality products, China is a bigger market for 77 countries, which is an increase of 20 countries since the year 2000. The US exports innovative products in the automobile industry, aerospace, medicine, computers, finance and pharmaceuticals, but China’s low labor costs make it a success in products that can be produced cheaply.

At the current rate of trading, China will surpass the US and become the largest trader by the end of this year.

“The center of gravity of the world economy has moved to the east,” Mauricio Cardenas, the finance minister of Colombia, told AP. “I would say that there is nothing comparable in the last 50 years.”

While the recession hit US businesses hard, some began to thrive in China. Shin, the businessman at ENA Industry Co. who sold auto parts, moved his struggling business from the US to China. And across the world, people have begun to recognize the importance of China in the future world economy. Parents are increasingly encouraging their children to learn Mandarin in school.

“Mothers who send their kids here believe our children’s generation is the China generation. In the future, without learning Chinese, one won’t be able to get a job,” said Nancy Ching, who opened a Chinese-language school in South Korea.

China is also starting to look into markets that were so far dominated by the US. Rather than exporting products, the Chinese hope to soon sell services and investments, including construction and engineering. By building roads, dams, highways, and other structures in developing countries, China is now rivaling the US and Europe in areas it never touched before.

“When we see the people from America, they say ‘We want to assist Kenya’. But I don’t see it. China comes and I see one thing: the road,” said Joseph Makori, a professional driver in Kenya, where Chinese companies are increasingly winning government contracts to do construction.

China’s trade is reaching beyond just economic partnerships with countries in need of cheap products. The world’s most populous country is becoming an influential power in a range of aspects. While China is set to surpass the US and become the largest trader by the end of 2012, it may not be long before the countries will compete politically. – RT