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Johannesburg. – The gloves are coming off in talks on South Africa’s decision to unilaterally cancel bilateral investment treaties with European countries. A diplomatic row erupted on Monday between Trade and Industry Minister Rob Davies and Karel de Gucht, the EU’s commissioner for trade, who said the decision was not the right one and would have an impact on EU investments. De Gucht had a meeting with Davies, who is spearheading the Bill to replace the BITs, and said he had expressed his views on the matter. But Davies denied BITs had been discussed at the meeting.
“It is absolutely not true. We did not discuss it at all. It was not part of our agenda. We were discussing agricultural and trade issues. The EU is offering us less free access to its markets than other countries.”
He said the intended legislation would contain full protection for investments from the EU.
“We believe the bilateral investment treaties have served their purpose. We therefore decided to lapse them. Investment in South Africa will continue to be safe and secure.”
Davies said he had previously heard De Gucht’s views on the investment treaties. BITs were mainly entered into in the early 1990s, when the democratic government sought to calm investor fears over the risk of nationalisation. Davies said last week that the existence of such treaties had shown no correlation with foreign direct investment into South Africa.
De Gucht was flanked by Roeland van der Geer, the EU ambassador to South Africa. He said the EU knew only last year of South Africa’s intention to renounce the treaties. The EU was South Africa’s biggest trading partner and the country received 88 percent of its FDI from the economic bloc, De Gucht said. The trade commissioner did not mince his words when attacking South Africa’s unilateral action.
“I value our relationship with South Africa. To say, ‘look at our legislation full stop’ is not the right approach. I must reiterate that we are not amused by South Africa on these treaties. The new legislation is not giving the same protection at all.”
He continued: “I can hardly imagine it will not impact on investments from the EU. Protection is going down with the intended legislation. The bilateral investment treaties are a competence of the EU. We are considering all our options. The legislation has no fair market and standard of protection is inferior to the treaties.”
De Gucht said Davies had told him at their meeting that there was nothing that could not be solved. He also explained the reason for the interception of citrus fruit from South Africa.
EU citrus growers last week demanded the bloc take immediate drastic measures, such as a ban on imports of citrus from South Africa. They said 34 cases of black spot disease were found in citrus shipments from South Africa.
South African citrus growers stopped exporting to the EU in September. De Gucht said the interception of citrus would continue as long as there was a risk of contamination. The EU and South Africa are currently discussing the country’s exports of sugar and wine to the bloc. – Business Report.
Online Reporter