Deputy Foreign Minister Aziz Pahad Arrives in Berne Ahead of the Annual Meeting of the Working Group Between South Africa and Switzerland

Berne - South African Deputy Foreign Minister Aziz Pahad has today, Tuesday 18 October 2005, arrived in Berne, Switzerland on the first leg of a three nation European visit that will see him also visit London and Paris.

This visit comes within the context of South Africa's objective to consolidate North-South relations to achieve the developmental agenda of Africa and other countries of the South.

Switzerland, on 20 May 2005, announced that it had granted South Africa special status on the Swiss foreign policy agenda as one of the important areas for Swiss interests outside Europe.

Deputy Minister Pahad will later today co-chair, together with his Swiss counterpart, Secretary of State for Foreign Affairs Dr Michael Ambühl the annual meeting of the Working Group between both countries in Berne, Switzerland scheduled for Tuesday - Wednesday, 18-19 October 2005.

The annual Working Group meetings between the two Departments of Foreign Affairs have proved useful in strengthening bilateral relations and trilateral co-operation in technical areas such as de-mining, conflict management, and human security and development co-operation in the rest of Africa.

In this regard, A Declaration of Intent providing a framework for trilateral co-operation in Africa in such areas as governance, humanitarian assistance, economic empowerment, de-mining, conflict prevention and private enterprise development was signed during the visit of President Mbeki to Switzerland in June 2003.

Deputy Minister Pahad and his Swiss counterpart Dr Michael Ambühl are expected to, during the Working Group meeting discuss the:

• Status of bilateral and economic relations between the two countries;
• Current developments in Africa and the EU;
• Identify possible areas of co-operation in the context of the Declaration of Intent on Joint Co-operation in Africa, co-operation in the fields of trade, science & technology and development; and
• Other issues of mutual interest including the reform of the United Nations and the Middle East Peace Process.

Deputy Minister Pahad will later today Tuesday, 18 October 2005, also pay a courtesy call on Foreign Minister Micheline Calmy-Rey.

Deputy Minister Pahad is expected to depart from Switzerland on Wednesday, 19 October 2005 for France where he is expected to hold a series of discussions with members of the French government and academia to ascertain the European perspective of developments in Africa and the Middle East including Israel and Palestine, Iraq and Iran while also discussing the status and consolidation of bilateral political and economic relations between both countries.

Bilateral Economic Relations

Switzerland is one of South Africa's main trading partners with an annual trade turnover of around R10.4billion in 2004 (up from R8.6 billion in 2003). South Africa is an equally important trading partner for Switzerland, reportedly the most important trading partner on the African continent. South Africa is Switzerland's 36th largest export destination. South Africa is currently running a trade surplus with Switzerland valued at 4.1 Billion Rand.

Exports

South African exports to Switzerland (Jan to Dec 2004)

• Nat/cultured pearls, pre + semi-precious stones and metals R 6,180m
• Base metals and articles thereof R 421m
• Prepared foodstuffs, beverages, tobacco etc R 130m
• Mineral products R 138m

Imports from Switzerland

South African imports from Switzerland (Jan to Dec 2004)

• Machinery and mechanical appliances, electrical equipment, etc R959m
• Products of chemical or allied industries R990m
• Optical, photographic, surgical instruments, etc. R 402m

Foreign Direct and Portfolio Investments

A number of Swiss companies have considerable operations in South Africa, with many also utilising South Africa as their base for doing business with the rest of Africa, and especially Southern Africa.

South African subsidiaries and branches of Swiss companies employ around 28 000 people and represent well-known companies such as Nestle, Novartis, Sulzer, Hoffmann La Roche, UBS, Credit Suisse, Winterthur International and Schindler.

In total, between 250 and 300 Swiss companies are represented in South Africa.

The overall Swiss FDI invested in South Africa amounted, at the end of 2003, to a total of CHF 1.16 billion (R5.8 billion) (Source: Swiss National Bank).

According to the South African Reserve Bank the total of Swiss FDI invested in South Africa accounts for CHF 1.36 billion (Rand 7.62 billion), making Switzerland the 7th largest investor in South Africa.

The overall Swiss portfolio investments in South Africa amounted, at the end of 2003, to a total of Rand 8.57 billion (CHF 1.53 billion).

TINSSA and other trade activities

South Africa is currently Switzerland's most important trade partner in Africa and a springboard from which Swiss companies can expand into Africa.

In the framework of the preparation of a Swiss-South African Investment Forum for the automotive and allied sector in late 2004, the Swiss advanced the idea of creating a network, bringing together several important partners from the Swiss-South African business community.

In April 2004, the Trade and Investment Network Switzerland - Southern Africa (TINSSA) was launched; based on a Memorandum of Understanding between the Embassy of Switzerland and partner organisations.

TINSSA's main objective is to strengthen economic ties between Africa and Switzerland as well as to provide an information network of business opportunities. A seminar took place in September 2004 in Zurich, Switzerland. A follow-up mission to South Africa is presently being organised for October 2005.

European Free Trade Area (EFTA)/ SA Customs Union (SACU) In May 2003, negotiations commenced between Southern African Customs Union (SACU), Switzerland, Norway, Iceland and Liechtenstein on a free-trade agreement between SACU and the European Free Trade Area (EFTA).

The trade deal is designed to allow South African companies easier access to EFTA markets through reduced tariffs on goods and services imported from South Africa. The intention is to synchronise South Africa's trading relations with EFTA with the provisions of the SA-EU Trade, Development and Cooperation Agreement (TDCA).

On 26 August 2005, with the exception of those issues listed below, EFTA concluded their negotiations on a Free Trade Agreement and the related bilateral Agreements on Agriculture between the EFTA States and SACU. It is expected that the outstanding matters would be finalised by the middle of October and that the various texts would be initialed soon thereafter, which would mark the start of ratification procedures. Initial indications are that the agreements would enter into force on 1 July 2006.

Issued by Ronnie Mamoepa on 082 990 4853

Department of Foreign Affairs
Private Bag X152
Tshwane
0001

18 October 2005