Deputy Minister Zuko Godlimpi: Trade, Industry and Competition Dept Budget Vote 2024/25, NCOP

Honourable House Chairperson
Minister Tau and Deputy Minister Whitfield
The Director General and the dtic team
Select Committee Chair, Honourable Boshoff

Following the President’s formation of the Government of National Unity, the Minister, supported by myself and Deputy Minister Whitfield, has hit the track at full throttle.

From multiple deep-dive strategic sessions with officials at the dtic to various stakeholder engagements and more recently as indicated by the Minister, international engagements on both AGOA and BRICS.

Honourable members, let me take you through some key outcomes of the 14th BRICS+ Trade Ministers Meeting and how we can use them to advance our industrial policy objectives.

On Strengthening Multilateralism

Honourable members, the global trade system remains fraught with inequalities and inconsistent application of rules and norms. South Africa is one of the leading voices calling for the protection, deepening and strengthening of multilateralism.

Against this objective reality, we must continue to call for the reform of multilateral institutions such as the World Trade Organization (WTO) to foster international cooperation and interdependence and ensure the meaningful participation of
developing countries in global trade to advance their economic development.

The recent BRICS Trade Ministers Meeting I attended on behalf of Minister Tau spoke in one voice about committing countries to promote predictability, stability, and legal certainty for international trade.

This means that we must oppose the emergence of unilateral tariff and non-tariff measures as a result of the protectionism we are seeing globally. The BRICS group of countries agreed to reaffirm and defend the principles of Special and Differentiated
Treatment (SDT) in the WTO and Common but Differential Responsibility and Respectful Capacities regarding our  responsibility towards climate action.

Building on the collaborative efforts demonstrated at the United Nations Framework Convention on Climate Change and its future Conference of the Parties (COPs), the BRICS+ members agreed to form a consultative framework that allows our
representatives at the WTO to meet on an ad hoc basic and have informal dialogues when the need arises to discuss trade-related issues of common concern.

This is notwithstanding an acknowledgement by the member countries of areas of divergence in perspective on some contentious issues at the WTO. The consultative framework will help us identify issues of common interest and provide space for persuasion and negotiations on areas of difference while maintaining our commitment to the principles of a development-orientated world trading system that is predictable, fair, and equitable.

On Addressing Global Challenges

Honourable members, the pressing challenges posed by climate change and environmental degradation call upon us to improve coordination and adopt a multilateral, agreed-upon approach to climate change action.

While recognising the importance of addressing climate change, we stressed at the 14th Minister’s meeting of BRICS’ Trade ministers the negative impacts of unilateral trade measures, such as the Carbon Border Adjustment Mechanism (CBAM), on
developing countries.

The BRICS+ Trade Ministers Meeting called for a just and equitable transition to a low carbon economy. It urged developed countries to provide adequate financial and technological support to developing countries to facilitate this transition, as agreed to at the United Nations Framework Convention on Climate Change’s (UNFCCC) Conference of the Parties (COP).

BRICS Members have agreed to ensure that measures taken to combat climate change should respect WTO commitments, and should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade.
To this end, we have agreed to cooperate and resist the adoption of such measures in international fora.

It was important for the developing world to reaffirm the importance of upholding and recognising the WTO’s Special and Differential Treatment provisions and the UNFCCC’s principle of equity, Common but Differentiated Responsibilities and
Respective Capabilities (CBDR–RC) within national circumstances, encouraging all nations to engage in climate action, while considering their unique circumstances and development levels.

On green industrialisation and critical minerals

Honourable members, during our deliberations, BRICS+ members also recognised that critical and non-critical minerals and other raw materials are crucial for new energy industries. In this context, BRICS Members agreed to work towards establishing a regular dialogue on critical and non-critical minerals and other raw materials and their extraction and processing  technologies to ensure the resilience of trade flows and value addition close to the source.

We have committed to further collaboration on minerals beneficiations needed for a low-carbon emission technologies future. We will endeavour to collaborate to ensure that mineral resources within BRICS Members and our regions are utilised for the
sustainable development objectives of our countries, our regions and their people.

On Agricultural Trade and Food Security

We also discussed the importance of food security and agricultural trade and stressed the need to address global food price volatility, ensure market access for agricultural products, and promote sustainable agricultural practices.

Other BRICS trade ministers joined South Africa in emphasizing the role agriculture plays in poverty reduction and rural development and supporting our alignment for increased cooperation among our BRICS countries in this area.

In this regard, we took the opportunity to discuss with our trade partners during bilateral discussions areas of concern regarding non-tariff barriers to our agricultural products’ entry into specific markets. Amongst the issues discussed included citrus transit treatment, alternative treatments for timber, and market access for our beef products.

On Promoting Inclusive Growth

Honourable members, during our engagements in bilateral meetings and the BRICS formal engagements, we raised the vital role of trade in promoting economic growth, job creation, and poverty reduction.

We emphasised the importance of increasing intra-BRICS value-added trade. We used our participation at BRICS to emphasise further the importance of inclusive trade policies that benefit all segments of society, particularly small and medium-sized enterprises (SMEs), and to encourage the exchange of best practices and experiences in supporting SME development and enhancing their participation in international trade.

On the Opportunities and challenges of Digital Trade and eCommerce

BRICS members and other developing countries continue seeing the impacts of ecommerce and digital trade in our countries and region. We highlighted the potential of e-commerce to drive economic growth, create jobs, and improve market access for
businesses, especially SMEs.

However, we also raised e-commerce’s challenges, such as cross-border taxation, consumer protection, and data privacy. Joined by the other BRICS Ministers, we agreed to support and call for developing international rules and standards for ecommerce to ensure a level playing field and maximise its benefits.

On Combating Under-Invoicing and Transfer Pricing

Under invoicing or undervaluation remains a persistent problem globally. This leads to negative consequences for the competitiveness of our infant industries in particular and our economy more broadly. Of particular interest to South Africa are the valuation challenges and transfer pricing in the customs space.

Customs’ treatment of Transfer Pricing adjustments is currently inconsistent worldwide. South Africa wants to establish best practices for how other customs administrations deal with transfer pricing. In this regard, we have used bilateral
engagement to facilitate knowledge sharing and technological transfers to help our authorities avoid the risks posed by transfer pricing.

Deepening BRICS Economic Cooperation

Honourable House Chairperson, deepening economic cooperation among BRICS countries is an important issue all BRICS members recognise and are resolved in deepening. We emphasised the importance of trade and investment facilitation,
infrastructure development, and financial cooperation in promoting economic growth and development within our bloc.

We welcomed the progress in implementing the BRICS Economic Partnership Strategy and called for further efforts to enhance trade and investment flows among member states.

We also discussed the potential of special economic zones (SEZs) to drive economic growth, create jobs, and attract foreign investment. As BRICS, we are committed to exchanging views on best practices in SEZ development and management and
exploring opportunities for cooperation in this area.

Linking the BRICS outcomes to Provincial and Regional economic growth

Honourable members, the question may arise in some members’ minds about import of the BRICS+ outcomes to the imperative for economic growth in our provincial and local economies.

As indicated by the President during his opening of parliament and the Minister in this debate, industrial policy will be the grounding logic of state-wide policy. Trade diplomacy is, therefore, an important instrument that our country can use to find new markets for South African-produced goods.

Therefore, ensuring a predictable, fair, and equitable global trading system that allows developing countries like ours to be competitive is essential. Defence of multilateralism against rising unilateral trade measures is essentially an integral part of supporting and protecting our infant industries and broadening the base for our industrial development.

BRICS+ has almost half (45%) of the world’s population and contributes 27% to the global GDP. Therefore, It is strategic for South Africa to participate in this platform for its own sake and in the interest of the continent of Africa.

How should we position ourselves as provinces and municipalities?

• On the opportunities presented in collaboration on critical minerals and the beneficiation for battery storage and renewable energy technologies, The provinces of Limpopo, North West, Northern Cape, Mpumalanga and Gauteng are endowed with critical minerals necessary for green industrialisation. Our EV White paper proposes an approach to creating a battery-manufacturing and fuel-cell value chain leveraging our lithium, copper, PGMs, vanadium and other critical mineral deposits. Collaborating with BRICS+ nations on critical minerals beneficiation can benefit our provinces from shared capabilities, technological transfers and investment inflows.
• The BRICS+ Meeting also agreed on a framework for collaboration on SEZs. Our provincial governments oversee our SEZs, and it is important to take advantage of opportunities to share expertise and best practices with BRICS nations such as China, which are leaders globally.

In Conclusion, Honourable House Chair
The 14th meeting of BRICS Trade Ministers was a productive and constructive engagement. We acknowledge that we are all facing challenges but commit to finding ways and exploring opportunities to deepen our economic cooperation among BRICS
countries and other developing countries.

Honourable members, in essence, this Budget Vote offers us as lawmakers and the public a clear sense of where South Africa’s industrial strategy is going. Our strategic perspective on economic growth and transformation is underpinned by a rigorous
industrialisation drive and we will continue to explore global partnerships for market access, technology-transfers and investment attraction to make our objectives achievable.

I thank you!