Walmart Promises to Work with African Suppliers after Challenge from Government
By: Sharise Cruz
Walmart is insisting that it will commit to working with South African suppliers despite concerns that the retailer’s proposed $2.3 billion purchase of a 51 percent stake of Massmart will flood South Africa’s supply chain with cheap imports.
“We share the need to be sensitive to the local supply chain and we are committed to working closely with local suppliers,” Walmart said in a statement released Friday.
Three South African government departments led by the Economic Development Department (EDD) and including the Department of Trade and Industry and Department of Agriculture and the Forestry and Fisheries, previously submitted criticisms of the merger to the Competition Tribunal, stating that “a merger of the size of the proposed Walmart/Massmart transaction, and with the size and leverage of the parties which are involved, could, if not properly regulated, go some way towards undermining the New Growth Path.”
The submission sought to require Walmart and Massmart to at least maintain, if not increase the percentage of pre-merger local procurement.
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The Minister of Economic Development and the Minister of Trade and Industry had previously determined that the merging parties were willing to cooperate with the government, but the EDD now feels that intervention is in order after what it stated was “the refusal of the merging parties to make any tangible or enforceable commitments, particularly with regard to procurement and small (especially broad-based BEE) businesses.”
A hearing with the tribunal to examine Walmart’s proposed control of Massmart will be held next month. The tribunal will hear evidence from all parties from May 9 to 13 and closing arguments will be presented May 16.
EU and US agree end to Airbus-Boeing supply chain tariffs
The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic.
Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years.
It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC.
The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn.
In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products.
Boeing-Airbus dispute by the numbers
- The dispute began in 2004
- Tariffs suspended for 5 years
- $11.5bn worth of goods affected by tariffs
- $3.3bn in duties paid by businesses to date
- 15% levy on aircraft and 25% on non-aircraft goods suspended
Both sides welcome end to tariffs
European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.
“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.
Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”.
The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."
This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.
Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”