COSATU warns China trade agreement could ‘destroy’ SA’s car manufacturing industry

The Congress of South African Trade Unions (COSATU) has warned that South Africa’s new trade agreement with China could potentially “destroy” the country’s car manufacturing industry.

The two countries recently signed the framework agreement on economic partnership for shared prosperity, which will see China provide duty free access for South African exports, while also increasing its investment in the country.

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The deal comes on the back of increased calls for higher import duties and excise taxes on imported vehicles from China.

Speaking on the sidelines of the State of the Nation Address (SONA) on Thursday, COSATU’s parliamentary co-ordinator, Matthew Parks, said government must prioritise local manufacturing automotive plants, which provide jobs to thousands of people.

“Tariff free access of South African goods to China sounds great but an exchange, if we reciprocate for tariff free access of Chinese goods to South Africa, that would destroy our manufacturing industry because China is just so far down the road ahead of us in its manufacturing capacity, cost, et cetera.”

However, Minister of Trade Parks Tau said the trade union federation’s concerns are misplaced.

“We only have seven original equipment manufacturers in South Africa, so it’s not like every product that’s sold in South Africa is produced in South Africa. So, we need to be realistic about what constitutes the automotive sector in SA.

“Are we working with existing industry to help it survive, grow and transition? We certainly are. The president [Cyril Ramaphosa] just announced an incentive for New Energy Vehicles and industry has been part of that, so we shouldn’t be in a situation where we say we have current investors, let’s not allow new investors.”