MINUTES
The Minister of Trade and Industry, Mr Alec Erwin, briefed Members of Parliament on the plans of the Department for the next period. The Minister said that the Department of Trade and Industry (DTI) covers all aspects of trade policy, promotion and negotiations. The DTI deals with the bulk of the economy and all legislation which regulates commercial activities. The Minister said that the DTI is also responsible for :

Non Proliferation Council

Chemical Warfare Council

Industrial Development Corporation

South Africa Bureau of Standards

South African Creditation System

Administer budgets of the South African Council of Research

The DTI has also set up new organisations to provide various kinds of support systems to small and medium businesses.

The Minister said that the DTI in the next period would consider the following :

The DTI has been addressing for some months the structure of the DTI and intends to make some changes. Changes will include the setting up of a new directorate to deal with a community economy development programme.

Introduce three main positions

Parliamentary Officer, whose duties will include the study of the progress of legislative processes

Communications Officer, to communicate current issues to parliamentarians

Liaison Officer, to ensure all parliamentarians are in possession of all DTI publications and information.

The DTI is currently examining and making changes to the DTI.

one of the weaknesses is believed to be the insufficiently active profile of the DTI. A project will be introduced to improve the interface of the DTI with the public;

changes are to be made to the Companies Office and Patents Office;

introduce changes in order to measure, record and monitor impact of reports administered;

making policy documentation more accessible.

The Minister identified the following main trade agreements to be dealt with:

European Union Agreement

The European Union Council had agreed to the agreement negotiated and this could be implemented in January 2000. The agreement must first be processed in the Portfolio Committee, ratified in Parliament and then public education on the agreement will follow.

The SADC Agreement is to be completed and concluded.

A wide range of economies in SADC are confident that agreement will be concluded soon. The Minister said that other states have made counter offers, which are seen as being too cautious. The first part of the offer will be implemented in January 2000, this does not cover a great deal of the industry.

South African Customs agreement also to be concluded.

The Minister is of the opinion that this is a very difficult negotiation.

World Trade Organisation

This is also seen as an extremely important negotiation, especially for developing countries.

DTI have opened a process of negotiations with the United States

These negotiations do not relate to standards and trade, but are rather looking into facilitating trade than lowering tariffs.

DTI is commencing next round of tariff reforms.

The DTI has achieved what it planned to achieve. The tariffs have been reduced from 20% to 10%. The government is of the view that this does not relate to the unemployment crisis as is believed by trade unions.

Structures have been developed for these activities.

Three major challenges for government in this area:

DTI have completed a regulatory review, of which the outcome will be published once Cabinet has seen it.

Complete study on access to finance by small and medium enterprises. The main challenge is to develop a more efficient Capital market and the DTI commenced negotiations with the financial sector.

Information is not made available readily to the public to allow people to get involved.

Deals with strengths and weaknesses of the empowerment policy.

In the next period the DTI will be carrying out reform in the Companies Act and Acts involving Insolvency and Liquidation. The reform will relate to the Consumer Court that is to be established.

The Minister confirmed that the Liquor Bill is to go before the Constitutional Court in September. The Gambling Bill is presently under discussion with provinces. The National Lottery envisaged is to start in early 2000.

An ANC member thanked the Minister for the fruitful briefing, but raised his concern for the SMMEs promotion and support.

The Minister's response was that the DTI has a grant-based system with grants of up to R3m, for small and medium enterprises. Provision is also made for a risk guarantee of up to 85% to banks if they give loans to small businesses. The problem is that banks are not using this opportunity. For small and medium enterprises the package of support is in place but at the moment the banks are not using this.

Ms F Mahomed (ANC) asked what time frames are being looked at in terms of the SMMEs?

The Deputy Minister of Trade and Industry, Ms Lindiwe Ngwane, said in response to the question that she could not tell what the time frames are. She said that recommendations are of such a nature that several departments have to be consulted. As soon as report has been discussed and approved by Cabinet it will become open and available for public scrutiny.

An IFP member asked whether provinces are also participating in the process of investments. The Minister said that a system is in place to use all nine provinces and referrals are made to provinces. The degree of co-ordination is much greater than in the past. The Minister added that government has to reach a higher foreign investment rate but investments have slowed down. But in comparison with other countries investments are well on route.

To a question raised on access to information and the development of a capital market the Minister said that people are reached but not enough. DTI have to introduce an outreach program by using electronic media and radio more. One of the components of this outreach is to use parliamentarians - give MPs more information and then allow MPs to market the information. The Minister said that the idea is to have free flow of information to the public without any request preceding it. On the question of a capital market the Minister said that banks are under greater competition as the capital market is opened. Banks tend to cut down on those areas which are more risky, which result in the movement towards the corporate sector and away from individual enterprises. The reason being that less risk is involved. Banks are interested in collateral and most small enterprises do not possess such collateral capacity, which in itself excludes small enterprises. The Minister added that the collateral problem has its own historical dimension. New approaches are needed and banks have been approached to look into this issue.

Since there were no more questions the briefing was closed.