Although it has been on the cards, South Africa’s suspension of its bilateral trade agreement with Germany has still sent shock-waves through the business community and the Freedom Front Plus is with great concern taking note of the cancellation of the treaty, Adv. Anton Alberts, the Freedom Front Plus’ parliamentary spokesperson on Trade and Industry said.
South Africa silently cancelled its agreement with Germany last week. Germany is one of South Africa’s largest and most important trading partners in the European Union (EU) and the development has caused great unhappiness with local German business people.
The suspension is part of South Africa’s new policy framework regarding investments to move away from bilateral agreements and rather establish legislation to protect investors.
The dissatisfaction amongst investors is in particular because it was generally accepted that the new Investments Bill would have been in place before investor agreements were to be unilaterally suspended.
According to Adv. Alberts, Dr. Freitag expressed his concern about the situation and put it straight that the ANC is acting risky with important trading partners.
“It is clear that the ANC thinks that the country’s relationship with the Brics countries will wipe out the possible losses which could be experienced with the EU. It is however risky because the EU is still our largest trading partner and Germany is the largest within the EU.
“The FF Plus also views it to be insane to cancel the investment treaty while the proposed Investment Act (the Promotion and Protection of Investments Bill) which has to create security for investors has not even been submitted to Parliament yet.
“This means that the EU and Germany have no certainty about investments in South Africa while the Investment Bill is pending and it could still take many years before the Bill is implemented.
“It is disrespectful to our trading partners and ordinary South Africans who are suffering economically. In addition, the new Bill will possibly be offering less protection to investors than the cancelled treaties. Nobody yet knows what is contained in the Bill,” Adv. Alberts said.
The development should further be seen against the background of additional factors such as the effect of the strikes in, amongst others, the motor vehicle production industry, as seen recently at BMW South Africa, which have already contributed to investors being frightened away.
“All these factors, together with restrictive labour legislation and the deterrent effect of trade unions, make that South Africa is internationally less and less being viewed as a safe investment choice.
“In the light of this, the government’s action against the EU and Germany is incomprehensible and a slap in the face of investors. Minister Rob Davies is acting recklessly with South Africa’s economy and the country cannot afford it,” Adv. Alberts says.
Contact no.: 082 391 3117 / 083 419 5403