Hon Chair, hon member, the question allows me to share with hon members what the ingredients of a successful free-trade agreement are. This first ingredient is that you must have a tariff schedule that states that you must not put taxes or heavy taxes against each others goods. And that is what the free-trade agreement is about, in part. Once you have done that, the second part is that you must have railway lines, roads, border posts, ports and so on that facilitate the movement of goods.
So, if you have that in place, it is not enough yet. You also need an industrialisation strategy. At the moment, Africa does not trade with itself. As indicated in the budget speech here, it is often said about Africa that we do not consume what we produce and we do not produce what we consume.
So, an industrial policy is about changing that reality. President Ramaphosa, in the state of the nation address in June, said that we must have a reimagined industrial strategy with master plans in different sectors. So, South Africa is working on this.
We now need to support what can be done elsewhere. I am working at the moment with the auto industry to find opportunities for car assembly in other African countries, where South Africa does a lot of what is called the auto-kit production and we then ship those kits to countries like, for example, Ghana and Ethiopia and they assemble it there. They do the final assembly there, so that we are, in fact, able to create integrated supply chains.
If you look at the success of the European Union, you will find that the reason why Europe has been able to unlock a lot of economic value is because they have created these value chains across borders. So, our challenge on the African continent is to do that. It requires a tripartite set of things: free trade, infrastructure, as the hon member has mentioned, and an industrialisation strategy.
The risks, as I have indicated, are that, if only South Africa was to produce in large quantities, we the industrial giant of the continent, will not be able to trade much with each other. Countries trade when they have complementary products. That is why we are putting this effort in to the auto sector, as an example.
The second risk is that goods may be made elsewhere in the world such as Asia, Latin America, Europe or North America and they are
imported into one African country, falsely relabelled and sent to all other countries. So, that would be another challenge to industrialisation. On that, I have replied in my previous reply on the steps we are taking.
The third risk is that even if we have free-trade rules, we may find that there are blockages at the border posts, either because Beitbridge, for example, is just too busy, the infrastructure is not big enough or because in one or the other country, someone wants a bribe before they will allow the trucks through.
So, I have no doubt that we will hit all these problems, but we must patiently work through them and fix all those problems. Europe took 40 years to develop its single market. We are not building a single market yet; this is a free-trade agreement. It is a conceptually different thing. So, we will have to work hard over the next number of years. Every time there is a problem, we must fix that problem and in that way, unlock the opportunity. Why are we doing it? [Inaudible.]