Encouraging Signs on South African Tariffs

"There are encouraging signs that high South African tariffs on agricultural imports will be coming down," International Trade Minister Lockwood Smith said after meetings with ministers in Cape Town and Pretoria.

Dr Smith is leading a trade mission to South Africa in a bid to kickstart a major expansion in two-way trade.

"During meetings with South Africa's Agriculture Minister Derek Hanekom and Trade Minister Alexander Irwin confidence was expressed that forthcoming reviews of tariff levels would see them come down. It was anticipated any reductions would take effect next year."

"There would be significantly enhanced export prospects to South Africa for New Zealand agricultural products, such as milk powder, butter, cheese, meat and frozen vegetables, if tariffs are cut."

Dr Smith said that if a 45% tariff on milk powder was reduced this could lead to cheaper supplies for people living in poorer, rural areas of South Africa.

"Given that the South African dairy industry concentrates on producing fresh dairy products, such a tariff cut would create few problems for local suppliers."

Dr Smith said Agriculture Minister Hanekom saw merit in this argument and was interested in looking further at the issue.

Mr Hanekom and Trade Minister Irwin had also been receptive to the idea of developing freer trade between South Africa and the CER countries, Australia and New Zealand.

"Both ministers were keen to explore further options for free trade. I undertook to report back with ideas for initiating a dialogue after discussing the matter with my Australian counterpart, Tim Fischer," Dr Smith said.

Meanwhile, Dr Smith said officials in Johannesburg and Cape Town were interested in a New Zealand business proposal to establish a low-cost, prefabricated housing operation in South Africa.

There is significant demand in South Africa for good, cheap housing but a New Zealand business has reported infrastructure difficulties in getting started in South Africa.

"When I raised this matter with senior officials in Johannesburg they indicated a willingness to facilitate solutions to problems. And in Cape Town a very interested member of the executive council for housing asked for more information on the New Zealand proposal."