TRALAC - Trade Law Centre

US announces a review of South Africa's place in its biggest preferential trade scheme (GSP)

Saturday, 26 October 2019

The United States plans to review South Africa's eligibility to participate in its Generalized System of Preferences (GSP), the largest and oldest American scheme to allow duty-free imports from less developed countries.

The South African review is "based on IP [intellectual property] protection and enforcement concerns", the Office of the United States Trade Representative said in an announcement on Friday. [See announcement here]. Dates for hearings on South Africa's involvement have yet to be announced. 

The review is rooted in South Africa's domestically controversial draft updates to copyright legislation, most notably the Performers Protection Amendment Bill and the Copyright Amendment Bill. The two intertwined drafts have seen heavy lobbying from various interest groups, and remain unsigned on the desk of President Cyril Ramaphosa.

A great deal of the debate on the draft laws is centred on the idea of "fair use", which could effectively exempt some intellectual property from copyright payments – including the likes of expensive textbooks.

That is one of the central complaints of the International Intellectual Property Alliance (IIPA), an umbrella organisation of American organisations, which lodged the complaint that led to the review.

The IIPA represents five trade bodies: the Association of American Publishers, the Entertainment Software Association, the Independent Film & Television Alliance, the Recording Industry Association of America, and the American Motion Picture Association.

 


"...South Africa:  USTR is accepting a petition from the International Intellectual Property Alliance based on concerns with South Africa’s compliance with the GSP IP criterion, in the area of copyright protection and enforcement. ..."

 

Members of each of those organisations, some 3,200 American companies in total, stand to lose money if South Africa loosens its copyright regime. The IIPA also consider South Africa to important in sub-Saharan Africa, with the chance that others may follow its lead. 

To remain part of the GSP – and benefit from around 3,500 items that can be imported into the US duty free under it – countries must meet standards around labour rights, provide fair access to their markets in turn, and have effective intellectual property right protections.

The IIPA has now complained that South Africa is not meeting its obligations in protecting intellectual property, and so must be kicked out of the scheme.

The US government did not provide detail of the IIPA's complaint, but the organisation has made plain its concerns with SA's moves towards a different copyright regime for years. In a public 2018 report it called for South Africa to be placed on an intellectual property watchlist – a warning shot of sorts – and in February this year it called for SA to be promoted to a "priority watchlist".

The way South Africa was going about rewriting copyright law "will, in particular, imperil the legitimate markets for educational texts, locally distributed works, and online works in general", the IIPA said.

It was particularly worried about plans to limit some types of copyright to a maximum 25 year duration – but more broadly believed South Africa was getting many fundamental things wrong. 

The new laws "suggest a mistaken assumption that there is a fixed market for works and that the government’s role is to regulate the internal relationships of the creative community, and their authorized distributors, rather than to incentivize new creative output," the IIPA said in its review.

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