UNITED STATES TRADE WITH SOUTH AFRICA AND THE ROLE OF UNITED STATES BANKS

Contents: Introduction • United States exports aiding "strategic investments" • United States exports aiding the monitoring and control of the black population • United States exports which aid South African military capabilities • TABLE I Yearly trade totals in selected commodities • TABLE II Selected commodity categories; itemized purchases by year • The report says this document, prepared by Mr. Howard for the Interfaith Centre on Corporate Responsibility (ICCR), was submitted to the Special Committee against Apartheid at a meeting held on 6 June 1979. The report says this paper is a brief analysis of United States exports to the Republic of South Africa and it being circulated in order to clarify conceptions regarding the nature and significance of trade with South Africa, and the role that United States banks play in financing that trade; this analysis addresses the question of whether or not recommendations to end bank loans to that country should include trade related loans as important to the maintenance of apartheid. The report says agreements with banks regarding restrictions on loans to South African Government-owned entities should include trade financing to these organizations; these agreements should include trade loans granted to the American exporter and not simply to the South African purchaser. The report says a rationale that trade-related loans are "safe" is based on the impression that trade is carried on in non-essential goods, "ketchup and tomato paste" as one bank official described it; in f act, strategic goods predominate in United States trade with South Africa; purchases are particularly heavy in power generation equipment, tele-communications equipment, railway equipment, computers, aircraft (the largest single category of imports), construction, mining and automotive equipment . Purchases are low in meats, dairy products, canned goods, clothing and pharmaceuticals; South Africa is primarily buying insurance against economic sanctions and military threats, rather than consumer goods used by the entire population; any rationale for opposing direct loans to such parastatal corporations as the Electricity Supply Commission (ESCOM) and the Iron and Steel Corporation (ISCOR) should also include the purchases of equipment for these organizations. The report says that private sector loans are as equally central to the maintenance of apartheid as are public sector loans; South Africa is a centrally planned economy with its main foreign exchange earner, the mining industry, operating in the private sector; the privately and public owned mining enterprises help finance its infrastructural development projects. It would be paradoxical to deny international credit to corporations aiding this infrastructural development while condoning trade lending which provides South Africa with the same technology; with a highly centralized economy (51 per cent of the productive capacity is under direct Government control), the 49 per cent of the economy that is privately owned are not simply bystanders in South Africa's strategic development strategies. The report says as an exporter of goods to South Africa, the United States is South Africa's largest trading partner. in Africa, South Africa imports nearly 20 per cent of all United States goods to that continent; trade with South Africa, particularly its importation of heavy equipment from the United States constitutes important financial and technical support for the economic well-being of the white minority Government. The report says an indication of the importance of export trade to South Africa is the fact that approximately 85 per cent of the $1,067,645,556 worth of goods sold to that country in 1977 are classified as trade in machinery and manufactured goods, principally such items as aircraft, electrical and non-electrical machinery, machinery for special industries, power generating machinery, computer equipment, telecommunications equipment and construction and mining equipment; this equipment is essential to South Africa in its efforts to buttress its economy against (internal and external) pressures which challenge the structure of apartheid. The report says some imports provide direct contributions to South Africa's military capabilities, both within South Africa and in attacks on neighboring countries; this equipment includes aircraft, trucks, parachutes, radar and electronic detection apparatus, computers, and herbicides, including 24-D and 2,4, 5-T with spraying apparatus. The report says with the success of independence movements in Angola and Mozambique, the development of similar movements in Zimbabwe (Rhodesia), coupled with increasing rebellions within South Africa itself, the South African Government's feeling of insecurity and vulnerability has grown; the international demands for change in South Africa's domestic policies have produced continued lobbying by a number of countries and organizations for total economic sanctions; all these factors have combined to increase the Government's insecurity; as a result, in the period 1974 to the present, the white minority has engaged in a concerted attempt at what William Raiford, researcher for Senator Clark's subcommittee on African affairs, describes as a programme of "strategic investment." The report says South Africa's purchases from the United States are predominantly in manufacturing and power generating equipment. Purchases were particularly heavy in electrical generating equipment, electrical distribution equipment and related parts; other strategic imports include purchases of railway, harbour and marine equipment. The report says steel production is concentrated in the Iron and Steel Corporation (ISCOR) which in recent years has embarked upon important development projects for domestic, industrial and military needs, and to develop a steel exporting capability. The report says the uses of these computers were the subject of a study by Richard Leonard, Computers in South Africa, A Survey of United States Companies; he pointed out that even recognizing United Nations and United States prohibitions on sales to the South African military, and monitoring of sales to atomic energy agencies, sales to the Government-owned Electrical Supply Commission and Iron and Steel Corporation are not prohibited under United States Government policy; equally significant is the great possibility that computers sold to private industries could either be resold to a defense or police agency or, more easily, timesharing could be arranged with such organization. The report says the 1000 mile border, much of which offers terrain suitable to guerilla infiltration and operation, particularly from Angola into Namibia, all point to the possibility of the application of herbicides to remove brush and forest covers. The report discusses he helicopter, Cessna, Dakota, Congressman Charles Rangel, the Department of Commerce, Anglo-American Corporation, and the defense and police departments.