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SA, Turkey To Improve Trade Relations Without FTA

by Lorys Charalambous, Tax-News.com, Cyprus

17 November 2011


The South African government has announced that it has chosen to pursue its increased trade with Turkey without negotiating a bilateral free trade agreement (FTA).

Turkey had proposed an FTA with South Africa, with a view to creating stronger trade and commercial ties, but the South African Cabinet’s spokesperson, Jimmy Manyi, disclosed that it wants, instead, to advance “a mutually beneficial, cooperative and balanced approach to building trade and investment relations with Turkey, and avoid the destructive competition that could result from ineffective management of a FTA."

Manyi said that South Africa still views Turkey as an increasingly important trading partner, but that, rather than focusing on an FTA, Pretoria believes a mutually beneficial relationship would best be served by collaboration that builds "complementarities in our economies and our trade and investment links".

According to Manyi, trade and investment ties should be structured to support the priorities of the two countries' respective economic development strategies and objectives. "An FTA,” he added, “does not allow for such a nuanced mutually beneficial approach to building economic relations and, instead, encourages destructive competition that will undermine our industrial and employment objectives."

It was confirmed that, although South Africa has over 70 companies operating in Turkey, trade and investment between the two countries remains comparatively low, offering scope for growth. Due to world economic conditions, annual trade between the two countries has fallen to about USD1.2bn from USD2.7bn in 2008.

TAGS: South Africa | tax | free trade agreement (FTA) | agreements | trade | Turkey | Africa

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