Trade and Industry Minister Rob Davies. Photo: Simphiwe Mbokazi.
Trade and Industry Minister Rob Davies. Photo: Simphiwe Mbokazi.

Davies: Flaws led to end of EU trade pacts

By Babalo Ndenze. Time of article published Aug 1, 2013

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South Africa has been forced to terminate a number of bilateral trade agreements with European countries entered into in the mid-1990s, as some contained “serious flaws”, says Trade and Industry Minister Rob Davies.

Davies said a number of these agreements with EU states were also poorly drafted.

“When South Africa undertook its democratic transition in 1994, there were investors who were unsure about the future direction of economic policy in the country.

At that time, we signed bilateral investment treaties (BITs) to give the comfort that their investment would be protected in South Africa.

Since then, South Africa has systematically strengthened its national investment protection regime and this is guaranteed in our constitution,” said Davies.

Davies was responding to Cope MP Graham McIntosh, who asked the minister whether he had terminated certain elements of trade agreements with Belgium, Luxembourg and Spain in the past 12 months.

“On whose advice was this action taken and what was the response of these governments and the EU to this termination?” asked McIntosh in a written parliamentary question.

Davies said it was widely recognised that the BITs entered into by South Africa and many other countries in the mid-1990s “are poorly drafted and exhibit a range of serious flaws”.

“It is also recognised that BITs play little, if any, role in investors’ decisions to invest or not in any country. South Africa now ranks amongst the most open investment jurisdictions in the world and we provide investment protection that is consistent with the highest international standards. The BITs have played their role and most have now reached their date for termination,” said Davies.

He said in terms of the legal provisions of the relevant agreements, the South African government had notified the Embassy of the Kingdom of Belgium of its intention to terminate the trade agreement on September 7 and on June 20 it had notified the Embassy of Spain of its intention.

He said a three-year review of BITs had ended in April 2010 and the relevant governments had repeatedly been made aware of the cabinet decision in 2011 and 2012. - Cape Times

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