Zimbabwe fears SA trade dominance

Zimbabwe fears SA trade dominance

By Susan Njanji

HARARE (AFP): The 15-month-old democratic South Africa which
many regional countries expected would act as a magnet to
attracting investment to the sub-continent is now being viewed as
a threat, particularly by neighboring Zimbabwe.

Fears of the economic giant dominating trade and economy in
the region were conspicuously expressed at a just-ended annual
congress of the Confederation of Zimbabwe's Industries (CZI), in
the resort town of Victoria Falls, about 800 kilometers (500
miles) northwest of here.

According to reports from the meeting, the issue of trade
imbalances and protectionist tariffs imposed by South Africa
dominated the discussions which were supposed to be centered on
the cost of money in Zimbabwe.

Industrialists and economists here, who celebrated the
political changes in South Africa last year from apartheid in the
hope that the regional peace would contribute to an overall
economic growth, have been caught off guard by the potentially
domineering regional giant.

Zimbabwe's industrialists are particularly impatient with
South Africa's delay in concluding a new trade agreement to
replace a 1964 one which favored Pretoria.

Zimbabwe, whose market-based economic reforms highly depend on
exports, is unhappy that trade between the two countries is
heavily skewed in favor of South Africa.

According to figures from the CZI congress South Africa
exports goods worth about four billion Zimbabwe dollars (US$500
million), against Zimbabwe's one billion dollars (US$125
million), yearly.

In highly emotional discussions, some industrialists called
for reciprocal trade war against South Africa which they charged
did not take Zimbabwe as a trading partner, but a market.

"If South Africa does not want us, there should be a trade
war... we should not compromise... there should be a counter-
strategy" said Jonee Blanchfield, managing director of a leading
chain of clothing stores.

She added that South Africa was "not trying to make us look
like idiots but to succumb to them so that we become a perpetual
market for their goods". Zimbabwe is rated to have the second
largest industrial base after South Africa in the southern
African region.

But South African ambassador to Harare Kingsley Mamabolo said
it might take three to four years to reach a trade agreement
while it sorts out its domestic woes following decades of
isolation.

"The purpose of any government is to support its industry. It
would be disastrous for South Africa to succumb to pressure and
change its trade laws overnight. It would be disastrous for you
to ask us to destroy our companies, " Mamabolo told the meeting.

Blanchfield said South Africa's aggressive protectionist
policies were lack of vision on its part and now the biggest
threat to Zimbabwe's economy.

"There is a very real danger of de-industrialization in our
country. To our South African counterparts we are a means of
enabling them to find markets for its goods in Africa," she
said.

The clothing and textile industries have been the hardest hit
sectors of Zimbabwe's economy.

Regionally, Zimbabwe has signed free trading agreements with
Malawi and Namibia, and is about to conclude similar pacts with
Mauritius and Zambia.