Norway saw South Africa as a significant potential future supplier of products to the Norwegian market, the Federation of Norwegian Commercial and Services Enterprises (HSH) director Carl Otto Løvenskiold said on Thursday.

Speaking at a Norwegian Forum of Competence seminar, in Johannesburg, he noted that by entering into innovative partnerships, countries could create lasting economic growth and social benefits.

The HSH and the Johannesburg Chamber of Commerce and Industry (JCCI) on Thursday signed a three-year memorandum of understanding (MoU) to promote trade relations among businesses in the two countries.

Løvenskiold commented that there were great opportunities to improve the relationship between businesses in these two countries and that these opportunities had to be exploited.

JCCI CEO Keith Brebnor added that he hoped the partnership between South Africa and Norway would continue for longer than the three years.

The MoU would encompass exports and imports, investment opportunities and other commerce-oriented programmes, he said.

State Secretary in the Ministry of Trade and Industry of Norway, Halvard Ingebrigtsen, emphasised that while Norway and South Africa had many differences, there were also many similarities, adding that there were business profiles that matched each other.

The countries’ industrial expertise could complement each other and through the transfer of knowledge and skills, both would benefit, said Ingebrigtsen.

In particular, he highlighted that it was impressive that so many of South Africa’s entrepreneurs were women. Female entrepreneurs in Norway were in the minority, he noted, adding that the country was aiming that at least 40% of all new Norwegian entrepreneurs should be female by 2013.

Further, Ingebrigtsen stated that trade with other countries was crucial for Norway and that boosting its trade was a major priority.

HSH CEO Vibeke Madsen agreed that the country was very dependent on international trade, with the trade and services sector generating about 75% of its gross domestic product (GDP).

While the country’s trade in goods had increased 300% over the past five years, this was “still modest”, said Ingebrigtsen.

He noted the free trade agreement between the European Free Trade Association (EFTA) and the Southern African Customs Union (Sacu), which was signed last year, was an important first step in boosting the countries’ trade.

Sacu comprises Botswana, Lesotho, Namibia, South Africa and Swaziland, while Efta incorporates Iceland, Liechtenstein, Norway and Switzerland.

Madsen added that the FTA between EFTA and Sacu had the opportunity to expand trade, at a time when protectionism was becoming more prevalent, as a result of the global economic crisis.

HSH was, however, not in support of protectionism, she emphasised.

The organisation was aiming to increase imports into Norway from developing countries and middle-income countries, and saw great potential in South Africa’s fruit, wine and jewellery sectors.

DIVERSIFYING TRADE A MUST

Trade and Investment South Africa (TISA) COO Riaan le Roux told delegates at the forum that countries, South Africa included, had to diversify its products and markets.

This was a view shared by Ingebrigtsen.

Le Roux emphasised that while South Africa had come through the economic downturn reasonably well, it might not do as well during future economic crises.

South Africa was hoping to diversify its trade so that it did not export more than 25% of its products into the European Union (EU) by 2020. Otherwise, the next crisis might “terminally” damage the local economy, he said.

Trade relationships with Norway, which was not part of the EU, could open up new distribution networks into the Scandinavian markets for South Africa.

Le Roux noted that it was currently logistically challenging to enter these markets.

In turn, South Africa could also assist Norway into expanding its trade into the rest of Africa.

Clever alliances were needed to ensure that smaller developing countries like South Africa and Norway could boost trade, as these countries were too small to compete against developing giants like China and India, on their own, he stated.

Further, it was important for South Africa to also diversify its export products and services and promote products that were higher up on the value chain, and not only raw materials, he added.

Le Roux suggested that TISA and HSH should conduct a thorough study into trade in manufactured goods between the two countries, specifically on the capital equipment side.