Sacu talks resume with US

Business Day (South Africa) | 2006-04-18

Sacu talks resume with US

Presenter: Lindsay Williams
Guest(s): Karan Bhatia

The Business Day newspaper reports that stalled talks between the Southern African Customs Union (Sacu) and the US resume today. Classic Business Day gets Deputy US Trade Representative Karan Bhatia on the line

LINDSAY WILLIAMS: The Business Day newspaper reported that US representative Karan Bhatia was not confident that the talks would lead to an agreement. Karan, was your lack of confidence justified today? How did the meeting go?

KARAN BHATIA: The lack of confidence that the paper reported on was really about the agreement as a whole, but it was probably not justified - we had a great session today, a very good productive meeting, and one that I think has set us up well for making continued progress in trying to deepen and broaden the trade relationship between the US and Sacu going forward - so altogether I thought it was a very good day.

LINDSAY WILLIAMS: What were the topics that came up?

KARAN BHATIA: The principle point of conversation was over the nature of our trade and investment relationship, and what we can do to keep growing it. A couple of years ago we launched free trade agreement (FTA) discussions as we call them, and those had run into a bit of a challenging patch because there are a number of issues in the typical US free trade agreement that are a little challenging I think for some of the Sacu countries - or have been for some of the Sacu countries to address - but what we agreed on today was a framework for moving forward. This framework is going to try and do two things - it’s going to help us resolve some of these challenging bilateral issues within the FTA context, areas like intellectual property rights, and government procurement - so we’re going to try and see what we can do to come to a common understanding on that. While that’s happening - and that may take a bit of time - we’re going to work in different ways to try and grow our trade relationship by considering government agreements that will really have a meaningful beneficial effect on bilateral trade and investment.

LINDSAY WILLIAMS: The FTA process started in 2003 -we’ve moved now into 2006 - how long do you envisage this process taking before there’s some kind of finality?

KARAN BHATIA: I think there are two things here to keep in mind here - one is the broad-based comprehensive FTA that may take a little bit of time. We’re going to have to keep working through some of these tougher issues, but now we’ve got a structured way to go about doing it - I think that’s an important accomplishment. The other thing is in the meantime we’re going to be looking at areas of co-operation - some of which are related to the FTA and some which are not, things like co-operation potentially in the customs area or in agricultural trade. It’s a little short perhaps a full FTA, but nonetheless will have a full beneficial effect on companies here in Southern Africa that are looking to export to the United States, and likewise US producers that would look to having a stronger presence here in the Southern African market - so I think hopefully we’re going to see benefits from those kinds of engagement in the near future, perhaps in the next year or so.

LINDSAY WILLIAMS: Does the composition of Sacu present a challenge in itself? We’ve got South Africa which is growing at a phenomenal rate, and then countries like Lesotho and Swaziland are included. Does that mean agreements are difficult to conclude?

KARAN BHATIA: It’s always more challenging to conclude an agreement when you’ve got multiple partners on one side of the table, so yes, there’s some complication there. The fact that they’re at different levels of development, and there are different sets of issues is something that makes it a little more challenging - but again I was very encouraged coming out of our meetings today because I do feel that among all of the partners, the five for Sacu members and the United States, there’s a common vision, a common desire to have a free trade agreement at the end of the day. So there may be some specific challenges that we’re going to have to work through, but I feel good overall.

LINDSAY WILLIAMS: Your portfolio includes overseeing US trade relations with East Asia, which includes China and Japan, South Asia and India - is it tempting for a cynic to look at this and say that Sacu compared to India, China and countries like that is not really at the top of the list?

KARAN BHATIA: No, actually I don’t think so - witness the fact that we don’t have free trade agreement negotiations going on with either India or China. Those are two countries that we have strong and growing trade relationships with as well, but it’s not a zero sum game. I think we can have vibrant trade relationships with those and other countries, but also with Sacu. South Africa obviously is a major trading partner for us, the Sacu region as a whole is important - it’s an area that we’re looking to grow, it’s a dynamic region, and the economic growth here has been good - so we are looking to meaningfully engage, and again I just point to the fact that we have FTA negotiations with Sacu.

LINDSAY WILLIAMS: Again according to Business Day you are quoted as saying “trade has more than doubled in the last five years”. Do you envisage that sort of growth to continue?

KARAN BHATIA: I very much hope so. I think the trade that’s benefited by the preferential trade access that’s been give to Sub-Saharan Africa under our Africa Growth and Opportunities Act (Agoa) has certainly helped that impressive growth in exports by Southern Africa, but I don’t think it needs to stop there. I believe there’s good potential to grow - the US market is a very large, growing and healthy market, and Sacu and South Africa specifically are competitive economies - so I think there is the possibility for it to grow. Hopefully with the kinds of agreements that we contemplated in today’s session it will grow even faster - so again I’m optimistic.

source: Business Day