MEDIA RELEASE THE DEPUTY PRIME MINISTER AND MINISTER FOR TRADE

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AUSTRALIA - SOUTH AFRICA ACTION PLAN UNDER WAY

Australia and South Africa this week started a process which would develop strong new trade links between and beyond the two countries, the Deputy Prime Minister and Minister for Trade, Tim Fischer, said today.

Mr Fischer was speaking after agreement on a trade action plan at the first Joint Ministerial Commission between the countries, in Pretoria on Wednesday and Thursday (July 9-10).

"Australia and South Africa may be trade competitors in some areas, but there is plenty of opportunity for trade between us, as South Africa's position as our fastest-growing top 20 trade partner demonstrates," Mr Fischer said.

"One top of that, there are very real opportunities to cooperate with each other to reach out to third markets.

"After this week's talks in Pretoria, we have a clear and positive action plan that will expand existing bilateral trade links, and develop the potential of cooperation between Australia and South Africa to access other markets.

"For example, there is considerable scope for the automotive industries of Australia and South Africa to exchange information in respect of developing export capacity, both in vehicle manufacture and trade in components.

"Both countries can also benefit from cooperation in the development of health services - for example in health financing systems, provision of health services to people in rural and remote regions, and health promotion techniques."

The action plan includes investigation of ways in which Australian companies could become involved in major infrastructure projects in southern Africa, a detailed study of synergies and complimentarities between the two economies, exchanges on standards issues, and expedited negotiations on a Double Taxation Agreement and an Investment Protection and Promotion Agreement.

"The plan also envisages further bilateral cooperation with South Africa in international forums," Mr Fischer said.

"I hope this will include South Africa joining the Cairns Group of free-trade agricultural nations at the group's next meeting," Mr Fischer added.

Attached: Joint communique and action plan

FIRST AUSTRALIA - SOUTH AFRICA JOINT MINISTERIAL COMMISSION

PRETORIA, JULY 9-10, 1997

JOINT COMMUNIQUÉ AND ACTION PLAN

The South African and Australian Governments warmly commended the work done at the first Australia-South Africa Joint Ministerial Commission held in Pretoria on July 9-10, 1997. The JMC was jointly chaired by the South African Minister for Trade and Industry, Mr Alec Erwin, and by the Australian Deputy Prime Minister and Minister for Trade, Mr Tim Fischer.

Ministers welcomed the extensive involvement of Ministers Mishali, Zurna, Jordan, Radebe, Bengu, Hanekom, and Deputy Minister Mokaba on behalf of South Africa. Mr John Moore, Minister for Industry, Science and Tourism, also represented Australia. Ministers discussed specific ways of developing the bilateral relationship.

The co-chairpersons emphasised the importance of developing a thorough and practical action plan, in order

- to ensure that opportunities identified at the JMC were quickly and fully followed up:

- to develop new sectors for trade, new fields for investment, and new areas for co-operative work;

- to maintain the momentum in growth of bilateral trade;

- to encourage reciprocal investments between Australia and South Africa; and

- to assist Australian and South African business firms to use each other's countries as a base for trading into the wider regions of Asia and Africa respectively.

Ministers noted the effective exchanges and contacts developed in each of the three specified working groups formed by business representatives (processed food and food processing, automotive parts, and mining equipment and technology). In addition a services group included business representatives, drawn from a wide variety of industries and product lines.

Both Ministers acknowledged that the first JMC was intended to provide a foundation for growth. They noted that signature of contracts, establishment of joint ventures, and finalisation of investment plans would take some time, and could not be expected at this first JMC. They did, however, commend the way in which the business representatives had already taken steps to convert contacts in contracts.

Ministers also highlighted the fact that the designated focus groups did not exhaust the range of new trade opportunities between Australia and South Africa. Ministers urged other firms, not yet active in bilateral trade, to explore and test the market. They emphasised the importance of first-hand, up-to-date experience of market conditions.

Ministers noted that growth in trade depended on the commercial decisions taken by individual firms. They did, however, reiterate the strong government support for bilateral trade, and discussed ways in which negotiations on a Double Taxation Agreement and an Investment Protection and Promotion Agreement could be expedited.

Ministers also examined ways in which trade in services could be increased. In addition, they discussed opportunities to encourage investments to consolidate the growth in trade between the two countries.

In the field of health cooperation, Ministers agreed that both countries could benefit greatly through cooperation in the development of health services. The Ministers identified the following areas of health sector cooperation for early action:

- health financing systems, including the development of social insurance arrangements and the regulation of private health insurance;

- schemes to enhance the safety and efficacy of pharmaceuticals in South Africa, and to improve their affordability;

- means of enhancing access of people in rural and remote areas as to health services, including through telemedicine and flying doctor services;

- health promotion techniques to help and encourage people to adopt safe and healthy lifestyles; and

- rehabilitation of public hospitals through the development of public-private partnerships.

Ministers commended the donation to South Africa of intraocular lenses and surgical equipment by the Fred Hollows Foundation.

Under the JMC a number of bilateral Ministerial discussions also took place. Agreements were reached to deepen cooperation in regard to tourism, agriculture, science and technology, public works, and education.

Ministers reviewed the work of the sector groups.

The automotive group concentrated its attention on ways of exchanging information between Australia and South Africa in developments in their respective car plans, especially in regard to the development of export capacity. The focus of this work would be the period beyond the year 2000. The work would be directed both to vehicle manufacture and to trade in components.

The mining group dealt with a sector in which both countries have extremely well-established and mature industries. Opportunities therefore arise only in specialised, niche areas. The group proposed that further work be done on ways to refine the mineral database in Africa and to establish a means of access to exploration areas for "junior" companies. They suggested additional links between industry and research institutes, on such issues as mineral benefication, value-adding in mineral projects, the concept of limited life projects, rehabilitation of mine sites, and recovery of both contaminated and valuable product from closed mines. Members of the group will do further work on the prospect for collaboration in service agreements and joint ventures for specific projects in Asia.

The food groups discussed the need for a protocol on requirements for reciprocal market access for fruit and vegetables and livestock. They indicated a commercial interest in application of Australian electronic transfers for documentation for exports. The group reviewed, as did Ministers, the differential South African tariff regimes for meat products, especially the high tariff applied to mutton imports. The group considered that other opportunities existed for exports of Australian skills and techniques in quality control, processing and trading primary products. Issues related to the selling and marketing of cheese were discussed by the group, as they were between Ministers.

The services group discussed a wide range of prospective areas for further cooperation. The group decided to focus future work on the following areas of potential:

1. Trade enhancement. Need for agreed standards on manufactured products including low cost housing (regular bilateral reviews to be instituted to check on progress on specific outstanding standards issues); payment mechanisms for goods and services purchased outside of the normal business process and ICC500 provisions; managing the industrial change process to meet the challenge of global competition, and exchanges in the areas of:

- technology transfer across a range of manufacturing processes,

- standardisation and harmonised customs tariffs and their applicability,

- selection criteria and selection processes of joint venture partners and distributors,

- additional funding for specific South African and Australian government trade initiatives,

- training initiatives with a focus on quality control, and

- development of the concept of "trading houses" for small businesses.

2. Services. Opportunities to develop distance learning processes in South Africa, standardisation of electronic banking protocols, human resources management and training, options for the funding of training.

3. Information and technology. Sharing experiences in the privatisation of respective telecom organisations, developing high level customs computer systems, EDI applications in the trade facilitation processes, using the experience of "Tradegate" to enhance the adoption and use of electronic messages in selected commercial transactions, and the use of EDIFACT type messages in the trading and transport cycle.

4. Trade and transport. Review of South African port capacity using traffic forecasts into the next century, the role of Portnet as a possible landlord and regulator rather than as being an operator and the use of transport documents for cargo moving between Australia and South African and beyond ports.

In addition to this specific work in particular sectors, Ministers discussed ways to engage Australian firms in the major infrastructure projects planned for the Southern African region. They also decided to build on the research and analytical work done for this JMC by considering preparation of a sponsored, detailed study of the synergies between the two economies.

The principal elements of the action plan are as follows:

- continued negotiations on a Double Taxation Agreement and an Investment Protection and Promotion Agreement,

- further bilateral cooperation in multilateral forums, specifically in the Cairns Group, UNCTAD and the WTO,

- expansion of the scope of collaboration in health services,

- arrangements for exchange on developments in the two countries' car plans,

- work on a series of commercial projects in various aspects of mining,

- exchanges on standards issues,

- cooperation in a range of service industries,

- work on a sponsored, detailed study of synergies and complimentarities between the two economies, and

- intensification of technical cooperation in major infrastructure projects by both governments, leading to examination of ways in which Australian companies could become involved in major infrastructure projects in southern Africa.

Ministers agreed to hold the next JMC in Australia within 18 months.