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the EU and South Africa.  Eighty per cent of South African exports to the EU consist of diamonds and gold and these goods already have duty-free access to the EU, but beyond this the EU has tended to be rather protectionist.  Britain is South Africa’s largest trading partner but the rest of the EU is reluctant to give its products privileged treatment.  While the ACP countries, as has been noted above, are given some beneficial market access, South Africa’s per capita income is high enough to classify it as a developed, according to the World Trade Organization and, thus, to exclude it from this group of favorably treated countries.  

The EU and South Africa have recently negotiated a limited free trade agreement, but the products in which South Africa is most competitive, wines, spirits and agricultural products, are those with regard to which the EU tends to be most protectionist.  The agreement, signed on 11 October 1999, covers 90 per cent of the $20 billion of trade between the two partners, but only 63 per cent of South Africa’s agricultural goods.  The stability offered by this agreement could also have a positive impact on South Africa’s bond rating and ultimately on inward investment.  There is considerable concern in South Africa with regard to the impacts on the small-scale inefficient agricultural sector of imports of subsidized EU products.  This effect would be most strongly felt by the other members of the South African Customs Union, comprising South Africa, Botswanna, Lesotho, Namibia and Swaziland, which are also included in the agreement.

Clearly, if the EU wants to have an economic relationship with South Africa, and the rest of Sub-Saharan Africa, it will be necessary to limit the ability of its agricultural and labor intensive goods sectors to limit access to the EU market on the part of the industries that give employment to South African labor, outside of the gold and diamond industries.  A market- and democracy-oriented South Africa is of great importance to the future of the rest of Africa.  The EU can play a major role in encouraging this development, if it can contain the protectionist elements within its economic structure.

6.The Atlantic Rim in the Global Context.

During much of the past two decades the Pacific Rim was held up as the regional economy with the most potential and the one with which all other regions would be well advised to establish a strong relationship.  The arguments that various aspects of Japanese or Asian ways of producing goods, managing labor relations, and developing competitiveness provided the nations of the entire Atlantic Rim with blueprints for realizing their economic potentials are well known and will not be reiterated here.  They were often espoused by individuals who had only a superficial understanding of them.  Needless to say, growth curves tend to follow a “lazy S” pattern that often ends in decline rather than just in stagnation.  The experience of Asia during the 1990’s has demonstrated the folly of thinking that rapid growth can be continued ad infinitum and that fundamental distortions and excesses will not ultimately bring their own correction. This is not to suggest that Pacific Asia does not promise to be a region that will take its position in the global hierarchy of economies, but the path to that position does not promise to be a smooth one.  Western and Asian economists generally argue now that: 1) fundamental reforms are required before Asia will be able to sustain steady growth over an extended period of time, and 2) those reforms will be slow in being realized.  Thus the future for the Asian economy looks to be more a roller coaster ride than a steady assent.

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