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In addition, trademark concerns are becoming increasingly evident. Local companies and street vendors often "own" the trademarks of internationally known concerns. New trademark legislation was passed in January 1994 and is now awaiting implementation regulations. 8. Worker Rights

a. The Right of Association. Current South African labor law entitles all workers in the private sector to join labor unions of their choosing. However, the patchwork nature of that law effectively inhibits trade union activity. The result is an uneven and sometimes volatile labor relations climate, in which trade unions must rely as much on their own organization and strength as on their legal rights to achieve their objectives.

The recently elected government of national unity is drafting a new Labor Relations Act designed to consolidate and simplify South African labor law. The new law will conform to the right of freedom of association declared in the interim constitution, and promote quick and effective industrial dispute resolution by clarifying the rights and responsibilities of workers and employers.

Historically, public sector employees have been legally prohibited from striking. The 1993 passage of a Public Sector Labor Relations Act, while clarifying the colleclive bargaining process for public sector employees, still sharply restricts strike activity. Until a transparent and fair system of dispute resolution is in place, the pub. lic sector will continue to be a labor relations Nash point.

b. Right to Organize and Bargain Collectively. --The South African government does not interfere with union organizing in the private sector and has generally not intervened in the collective bargaining process. South African law prohibits discrimination by private sector employers against union members and organizers.

In spite of recent legislative changes, collective bargaining still does not apply to farm workers and domestic workers. Recent passage of the Public Sector Labor Relations Act (PSLRA) clarifies dispute resolution in the public sector, but has been criticized by the Congress of South African Trade Unions (COSATU) as undermin. ing collective bargaining by unnecessarily restricting public sector strike activity. That said, the Ministry of Labor's plans to consolidate the PSLRA into a single labor relations act has been resisted by independent public sector unions and associations.

Private mediation services are available and have been voluntarily resorted to by management and black trade unions to resolve industrial disputes. The Labor Rela. tions Act establishes an industrial court to rule in labor-management disputes. The most common complaints filed with the court concern dismissals, followed by unfair labor practices. A labor court of appeals oversees the industrial court and can overturn its decisions.

c. Prohibition of Forced or Compulsory Labor.–Forced labor is specifically prohibited by the interim constitution.

d. Minimum Age of Employment of Children. --South African law prohibits the employment of minors under age 15 in most industries, shops and offices. It prohibits minors under 16 from working underground in mining. There is no minimum age at which a person may work in agriculture.

e. Acceptable Conditions of Work. There is no national minimum wage in South Africa. The Labor Relations Act provides a mechanism for negotiations between labor and management to set minimum wage standards industry by industry. At present over 100 industries covering most non-agricultural workers come under the provisions of the act. The Occupational Safety Act sets minimum standards for work conditions and employment.

f. Rights in Sectors with U.S. Investment.—The worker rights conditions described above do not differ between the goods-producing sectors in which U.S. capital is in. vested and other sectors of the South African economy.

Extent of U.S. Investment in Selected Industries.-U.S. Direct Investment Position Abroad on an Historical Cost Basis—1993

(Millions of U.S. dollars)

Category

Amount

(1) 544

Petroleum
Total Manufacturing ....

Food & Kindred Products
Chemicals and Allied Products
Metals, Primary & Fabricated

(1) 149 41

Extent of U.S. Investment in Selected Industries.-U.S. Direct Investment Position Abroad on an Historical Cost Basis-1993—Continued

(Millions of U.S. dollars)

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Machinery, except Electrical
Electric & Electronic Equipment
Transportation Equipment

124
(1)
22
156

...............................

Other Manufacturing
Wholesale Trade
Banking
Finance Insurance

Real Estate
Services
Other Industries
TOTAL ALL INDUSTRIES

.......................

76
0
(1)
6
32
925

1 Suppressed to avoid disclosing data of individual companies.
Source: U.S. Department of Commerce, Bureau of Economic Analysis.

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Income, Production and Employment:

Real GDP (1989–90 prices) 3
Real GDP Growth (pct.)
GDP (at current prices)
By Sector:

Agriculture
Energy/Water
Manufacturing
Construction
Ownership of Dwellings
Finance Property/Business Svcs.
Other Services 4

General Government and Defense
Net Exports of Goods & Services
Real Per Capita GDP (USD)
Labor Force (000s)

Unemployment Rate (pct.)
Money and Prices (annual percentage growth):

Money Supply (M1) (pct/year-end)
Base Interest Rate 5
Personal Savings Ratio (pct.)
Retail Price Index (pct. change)
Consumer Price Index (pct. change)
Wholesale Price Index
Exchange Rate (A$1=U.S. cents)

Percentage Growth
Balance of Payments and Trade:
Total Exports (FOB) 6

Exports to U.S.
Total Imports (FOB)

Imports from U.S.
Aid from U.S.
Aid from Other Countries
Gross External Public Debt
Debt Service Payments (paid)
Gold and Foreign Exch. Reserves
Current Account Balance
Trade Balance with U.S.

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0 63.2

9.2 14.9 -10.7 -5.3

0 64.9

7.5 14.3 -10.7 -5.5

0 67.9

7.9 15.0 - 12.0 -6.2

NA-Not available.

1 Exchange rate Ouctuations must be considered when analyzing data. Percentage changes are calculated in Australian dollars.

2 1994 figures are all estimates based on available monthly and quarterly data in October 1994. • GDP at factor cost for base year indicated.

**Other Services includes com munity, recreation, personal and other services.
Figures are actual, average annual interest rates, not changes in them.
•Trade data recorded on a foreign trade basis

different to those recorded on a balance of payments basis. 1. General Policy Framework

Australia's gross domestic product (GDP) in 1994 was estimated to be US $317.6 billion. Real GDP is estimated to have grown by 4.3 percent, a substantial improvement from 1993's 3.2 percent. Nevertheless, the impact of the recession which began during the third quarter of 1989 and ended in 1991 continued to be felt; unemployment hovered between 9.5 and 10 percent during 1994.

U.S. economic interests in Australia are substantial, including direct investment worth approximately US $16 billion and a bilateral trade surplus of approximately US $6 billion (up by approximately US $600 million from 1993).

Although in area Australia is the size of the contiguous United States, its domestic market is limited by a small population (17.7 million people). The production of agricultural commodities and primary products is an important component of the economy; Australia leads the world in wool production, is a significant supplier of wheat, barley, dairy produce, meat, sugar, and fruit, and a leading exporter of coal, minerals and metals, particularly iron ore, gold, alumina, and aluminum. Export carnings are not well diversified; in 1993, primary products accounted for 60 percent of the total value of goods and services ex ports.

The drought which Australia suffered in 1994 affected the agricultural sector severely. The wheat crop, for example, was cut by an estimated 51 percent from the previous year, reducing export earnings and necessitating the importation of wheat, corn, and sorghum. Some commentators believe that the drought may reduce otherwise-attainable real GDP growth (as shown in the data table above) by approximately 0.5 percent.

To increase Australia's international competitiveness, the government has continued its longstanding effort to reduce protective trade barriers and deregulate largę segments of the economy. Privatization of government services at both the federal (airlines, banks, telecommunications) and state level (water treatment, transportation, electricity, banks) is being pursued. The government intends to sell the remaining 75 percent of Qantas to the public in 1995. Trade reforms begun in June 1988 resulted in an end to import quotas on all but textiles, clothing, and footwear, and lower tariffs on most imports. Although the 20 percent preference given by the federal government to Australian and New Zealand firms bidding on government contracts was abolished November 1, 1989, and civil offsets in December 1992, some state and territory governments continue to apply preferences in their contracts.

The Australian Government continued to provide substantial fiscal stimulus to the domestic economy in 1994. The budget deficit reached US $9.6 billion (3.4 percent of GDP). Public sector borrowing, more than funded the deficit, and took the form of treasury notes (US $427 million), treasury bonds (US $10.1 billion), and cash drawdowns (US $4.9 billion). As part of its Australian Fiscal Year (AFY) 199495 budget, the government announced its intention to cut the deficit to 1 percent of GDP by AFY 1996–97.

The money supply is controlled through an open-market trading system of nine dealers who act as a conduit between the Reserve Bank and the financial system. Transactions may involve purchases, sales, or trade in repurchase agreements of short-term treasury securities. Depending on liquidity conditions, the Reserve Bank may bypass dealers and buy or sell short-term treasury notes directly with banks on a cash basis. Banks do not normally hold liquid deposits of any size with the Reserve Bank. Instead, they hold call-funds with the authorized dealers. If a bank needs cash on a given day, it either borrows from other banks or withdraws funds it has on deposit with the dealers. Under the above money supply control system, foreign exchange flows and government deficits and credits have only limited impact on the money supply. The government also uses interest rate changes to influence the money supply. In 1994, official government interest rates were increased twice, by 75 basis points in August, and a full percentage point in October, to reach 6.5 percent.

A strong supporter of the Uruguay Round negotiations liberalizing international trade, the Australian government moved rapidly to ratify the Uruguay Round agrecments and became a founding member of the World Trade Organization (WTO) on January 1, 1995. Australia also advocates liberalizing trade within the Asia-Pacific region; it is a leading member of the Asia Pacific Economic Cooperation (APEC) forum, and strongly supported the November 1994 Bogor Declaration, in which APEC leaders set the goal of free trade in the region by the year 2020.

The challenge the government will face in 1995 is to maintain moderately high real growth and reduce unemployment without causing a revival of inflation and a massive increase in the current account deficit (by virtue of the impact growth has

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