Sacu to reopen trade talks with US
29 August 2005
Free trade negotiations between the US and the five-nation Southern African Customs Union (Sacu) are set to restart, following the intervention of President Thabo Mbeki. Sacu is made up of South Africa, Lesotho, Swaziland, Namibia and Botswana.
Discussions on a free trade agreement began in June 2003, but stalled in September 2004 on issues such as investment, competition legislation and policies, government procurement and subsidies to US farmers.
US and Sacu negotiators will meet again in late September, according to Business Day, with meetings to held every six weeks thereafter. The new target for the completion of the talks is December 2006.
Florie Liser, assistant US trade representative for Africa, said in early August that she was confident an agreement could be reached by the new deadline.
According to Business Day, discussions between South African President Thabo Mbeki and US President George Bush during the G8 summit in
July have given the talks new impetus.
The negotiators have agreed how to proceed, avoiding the pitfalls encountered in previous attempts. They have reduced the number of topics to be discussed at each meeting, so as not to overwhelm the stretched Sacu trade negotiators.
According to the government's programme of action, talks with the US will be narrowed to negotiating for goods and services.
Regional trade representatives face a punishing schedule, according to Business Day. This includes negotiations with Latin American trade bloc Mercosur, the European Free Trade Association, India and China, as well as the Doha round of international trade discussions.
Africa Growth and Opportunity Act
Until now, the negotiations have been a low priority for South Africa, as almost all of the country's exports enter the US duty-free in terms of the Africa Growth and Opportunity Act (Agoa).
The agreement has resulted in an 88%
increase in Agoa trade between the 37 African countries that fall under the act, although most of this increase is oil exports, mainly from Nigeria.
Nevertheless, non-oil products increased a healthy 22% over the period, with products from Sacu countries constituting the major part of this increase. Agoa covers some 98% of South Africa's total exports.
However, the act is to expire in 2015, while a free trade agreement would have no expiry date.
Liser says a free trade agreement will have benefits for Sacu that go way beyond Agoa, Business Day reports. It will allow South African companies to tender for US government contracts as though they were US companies.
And with 148 countries involved in the Doha round of World Trade Organisation negotiations, there is little scope to move beyond limited issues. Large negotiating groups tend to only agree on a small number of issues, Liser says.
Substantial US agreements
The US
has concluded substantial free trade agreements around the world, partly motivated by the success of Nafta, its first major agreement with Mexico and Canada. Partly as a result of the Nafta agreement, Mexico has grown from the 14th largest to the ninth largest economy in the world.
Since Nafta in 1994, the US has signed agreements with Jordan, Chile, Singapore, and Australia. An agreement with Morocco has been achieved, but is awaiting confirmation. The US congress has just endorsed Cafta, a large-scale free trade agreement with Central American nations.
If successful, the free trade agreement will be the first between the US and a sub-Saharan country, and the first time Sacu countries have jointly negotiated such an agreement.
The agreement would mean expanded market access for local brands into the US, and have a significant impact on South African exports. The US market is valued at more than US$9-trillion (roughly R58-trillion).
SouthAfrica.info
reporter
| 
