April 10, 2006

Mbeki: Economic and business ties to be strengthened with Tanzania / Cosatu warns of job losses on China trade deal

While South Africa has been benefiting from trade with Tanzania, the tide is about to change to also favour Tanzania - that decision was reached after President Jakaya Kikwete toured South Africa and held talks with President Thabo Mbeki. Mbeki said the Presidential Commission for Economic Cooperation - which has members from both countries - is set to meet in Dar es Salaam in June to highlight economic issues that will benefit Tanzania mostly.

The two presidents have planned the first economic forum aimed at further strengthening economic and business ties between Tanzania and South Africa. President Mbeki said the Tanzanian leader's official visit to his country had brought up some important economic, business and social issues. He agreed that at present, South Africa was benefiting more since it had 150 companies operating in Tanzania while very few, if any, Tanzanian companies had businesses in South Africa. "We want to see more Tanzanian products being sold in South Africa," Mr Mbeki said. On his part, Kikwete said that the move would not only give more opportunities to Tanzanian firms to do business in South Africa, but would also raise the country's economy and help reduce poverty in Tanzania. He added that Tanzania would like more tourists from South Africa to visit the East African country.

In the meantime, the Congress of South African Trade Unions (Cosatu) has warned government that thousands of textile workers, especially women, will soon join the unemployment queue. The labour federation says it was worried about South Africa's trade deal with China that had already left thousands jobless. The union federation has raised fresh concerns about agreements between South Africa and China arguing that there would be dire consequences for this country if careful consideration was not made between South Africa-China trade deals. South Africa's trade with China is growing at a rate of 26% annually, while there's shrinking trade with the US and United Kingdom.

Early in 2006, during his State of the Nation address, President Thabo Mbeki has said an agreement had been reached with China to protect South Africa's clothing and textile industry. The agreements include reducing China exports to the country, but the issue of free trade between the two countries' cannot be ruled out. Government said it consulted with all stakeholders, but Cosatu claimed they were only consulted in late 2005, and then parts of the agreements had been changed. Cosatu believes that the deal favours China as at least R40 billion of the total trade in 2005 was to the advantage of China. Since 2003, there has been a 480% increase in clothing imports from China. In the same period, there has been 62.000 job losses in the textile industry. (The Nation, Kenya / SABC News, South Africa)

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