US-SACU trade talks takes on centre stage

01/03/2004
US-SACU trade talks takes on centre stage

The fourth round of negotiations between the Southern African Customs Union (SACU) and the United States took place this weekend in Walvis Bay, Namibia. This round of negotiations is meant to create the framework which will allow the US and SACU to conclude a Free Trade Agreement (FTA) by December this year.

The current focus of talks is on industrialised goods, services and agricultural trade, very similar issues to those that stymied negotiators at the World Trade Organisation talks in Cancun, Mexico. Jonathan Moore, counsellor and deputy chief of mission at the US embassy in Windhoek, indicated that the US was interested in a FTA with SACU as it would increase trade, but that the US government had no specific interests in SACU and that specific interests would be left up to consumer demand in the US.

These talks have been seen as crucial to the economic prosperity of the SACU region, but many have warned of the dangers of negotiating with the extremely capable US trade talks team. Director of Nepru, Dirk Hansohm, stressed that the different levels of development in SACU member countries would have to be addressed, which in turn means that there would need to be an asymmetrical agreement to protect sensitive industries.

According to US chief negotiator, Florizelle Liser, the SACU-US Free Trade Agreement is an historic moment for both the US and SACU, in that it will be the first free trade agreement with countries in sub-Saharan Africa for the US, and this will also be the first free trade agreement negotiated by SACU as a whole.

"It will be important that the US-SACU FTA be a world-class agreement that sets up a strong framework for substantial trade and economic development - an agreement that serves as a model for other future free trade agreements," Liser said.

While SACU’s trade with the US has increased by more that 300 percent since 1994, the majority of this trade stemmed from South Africa, which exports 89 percent and imports 96 percent of the total imports and exports.

Anti-dumping

Meanwhile SACU is still waiting on the US to show its hand regarding the inclusion of anti-dumping in the free trade negotiations. According to industry experts, enthusiastic anti-dumping action by the US has hampered South African exports to the US. Anti-dumping is not currently part of the free trade negotiations, but Xavier Carim, South Africa’s chief negotiator has indicated his desire to include anti-dumping in the negotiations with the US.

The current view of the US is that anti-dumping should be discussed within the WTO talks. The next round of talks is due to be held in Maseru in May.

Carim was positive about negotiations indicating that the talks were still on track to meet the December 2004 deadline. "We don’t see eye to eye on a number of issues, but at least it is clear where the differences are and that helps," he said.

Differences in opinion existed with regard to agriculture, investment, sensitive industrial products and services. Carim was also adamant that SACU would not open its markets to subsidised products or products influenced by farm subsidies as this could harm local industries. The US has proposed an “investment chapter” be created which would detail the manner in which US companies would be treated in SACU member countries. The chapter would also outline important local issues, such as black empowerment.

Building Capacity

In order to assist with building trade capacity, the US has already delivered computers and printers as well as and funding for SACU staff. Training of staff in SACU countries has also been undertaken in order to improve trade capacity.

Xavier Carim pointed out that SACU’s mission is "about creating conditions that will deliver economic and social benefits for the block. Our success or failure will have a direct impact on the prospects for improving the quality of life of millions of people in the region," he noted.

Sources: New Era (Windhoek), Business Day

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