S. Africans Want New Trade Ties
Standing near the hors d’oeuvres table at a downtown Los Angeles hotel, dapper South African businessman Dries Groenewald downplayed the importance of the first trade mission from his country to the United States since 1986.
“You cannot just charge in and expect things to happen,” said Groenewald, chairman of Paradigm, a South African manufacturer of computer software.
So while historic change was afoot back home--where the white minority government and the African National Congress have moved toward power sharing as a prelude to majority rule--the delegation of representatives from 12 South African companies took a cautious approach in meetings with prospective U.S. trading partners.
“It is fatal to rush into business just because there is a sense of urgency, especially when it is not in our hands to make it happen,” Groenewald said.
For the delegates, the 13-day trip was less a chance to court American distributors than an opportunity to learn about U.S. markets. When they leave for home Sunday from Miami--their last stop after visits to Los Angeles, Chicago and New York--the South Africans hope to have established contacts that will help them open the new export markets their country desperately needs to escape its economic malaise.
They are banking that the call last week by the ANC for scores of state and local governments in the United States to lift--perhaps as soon as June--their limits on contracting with firms that deal with South Africa will begin prying the door to world trade back open.
During cocktail hour at the Ramada Renaissance Hotel, Pieter Malan, owner of Simonsig wines in Koelenhof, South Africa, sat with Joseph Herpin, western division manager for Palm Bay Imports Inc., a wine and spirits importer with offices in Newport Beach and Miami.
“I met Joe and he told me what to expect about the market in California,” Malan said. “Everybody I met gave me a little piece of the puzzle.”
Indeed, some of the Americans with whom Malan met went further, expressing hope that the call to lift sanctions would prepare public sentiment for renewed U.S.-South African trade. “They told me, ‘Let’s make some money,’ ” Malan said. “It’s such a logical attitude.”
The simmering political climate has many U.S. businesses lining up to take their crack at forging export markets of their own in South Africa, according to Regional Cook, chief executive of Cook International Inc., an international trade and investment firm in Long Beach.
Cook hopes to lead a delegation of U.S. business people to South Africa in June. “American businessmen have been calling me wanting to know when stability is coming, because there is a lot of money to be made over there,” he said.
The grip of economic stagnation on South Africa has steadily tightened since Congress--in hopes of helping strangle apartheid--overrode President Ronald Reagan’s veto in 1986 to impose tough sanctions.
President George Bush lifted Washington’s limits on trade with South Africa in July, 1991. But South African domestic production nonetheless has declined for three straight years. And the Pretoria government estimates that more than 20% of the country’s population is unemployed.
What South Africa needs now is the chance to trade itself out of that quagmire, said Stefanus Botes, who is an economic consul in Los Angeles.
“We need more exports of manufactured goods, of value-added goods where we make use of our own labor,” Botes said. “We can’t simply export the raw materials and then buy back the finished product from an overseas country. That is crazy.”
For South Africans, the trade mission will provide fuel for the long road back to international competitiveness, Cook said: “The way business is done now is very different from the way business was done in 1986, especially with the emphasis on global markets.”
South Africans will probably have to relearn the intricacies of doing business in the United States as well, said Frank Handler, an account executive with Jordache Enterprises who emigrated to the United States from South Africa four years ago.
Since arriving here, Handler said he has learned the importance of having “guys on the ground who know the local market--people who are connected.”
While delegates insisted that the trip was nothing more than a scouting mission, some detected nibbles of interest in their products.
Quentin Mildren--whose firm, Accsys, produces computerized time-recording systems for factories--said he found that a potential export market exists in California for his devices.
“We appear to be very advanced in our particular product,” Mildren said. “We can hold our heads high.”
Local Sanctions Still in Place
Eight of the 10 most populous U.S. cities penalize companies that do business with South Africa.
City Penalize companies with ties to South Africa? New York Yes Los Angeles Yes Chicago Yes Houston Yes Philadelphia Yes San Diego Yes Detroit Yes Dallas Yes Phoenix No San Antonio No
Big States Maintain Limits
Of the 10 most populous states, six have restrictions on dealings with firms that do business with South Africa.
State Penalize companies with ties to South Africa? California Yes New York No Texas No Florida Yes Pennsylvania No Illinois Yes Ohio No Michigan Yes New Jersey Yes North Carolina Yes
Biggest U.S. Employers in S. Africa
Under pressure from apartheid opponents, many U.S. firms have pulled out of South Africa, often selling their operations to locals. But some companies have remained.
Company Employees 1. Caltex Petroleum Corp. 2,168 2. International Paper Co. 1,772 3. Johnson & Johnson Co. 1,481 4. United Technologies Corp. 1,205 5. Joy Technologies Inc. 1,000 (est.) 6. Crown Cork & Seal Co. Inc. 858 7. Minnesota Mining & Manufacturing Co. 818 8. Colgate-Palmolive Co. 759 9. Indresco Inc. 745 10. Borden Inc. 645
Source: Investor Responsibility Research Center
