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Sacu-US trade negotiators set scene for post-AGOA deals

Published date:
Monday, 11 August 2003

The portfolio committee on trade and industry was reminded last week that trade negotiations were one of the trickiest aspects of any government's work, especially when it came to preventing any unintended consequences.

Indeed, the officials involved often have to do more ducking and diving around major issues of international and domestic concern than many diplomats have to, and if they drop any of the curved balls thrown at them, they face an uproar back home.

Xavier Carim, the chief director for trade negotiations in the department of trade and industry, was briefing the committee on two separate but inevitably linked sets of talks.

One was on the proposed free trade agreement between the Southern African Customs Union (Sacu) and the US, which is expected to be wrapped up by the end of next year.

The other was the much more imminent Cancun round of talks at the World Trade Organisation (WTO), the only international body dealing with the rules of trade between nations, which takes place in Mexico next month amidst much disarray in world trade ranks.

Carim admitted that many feared the seemingly irreconcilable differences between developed and developing countries, environmentalists and industrialists and farmers of all kinds could result in a repeat in Cancun of the chaotic 1999 Seattle round of negotiations.

Those talks were disrupted by angry protesters who besieged negotiators in their hotels and meeting rooms and generally prevented progress in the world trade agenda.

Since then, there have been further talks at Doha in 2001, at which some progress was made, mainly because of strict security.

The causes of all this conflict and strife around trade talks include vested interests, such as agricultural subsidies in developed countries, and the desire by developing countries to see more of their concerns and interests on the agenda.

Inevitably, those with the biggest muscle, which are usually the developed countries, tend to win but developing countries are fighting back.

In addition, the Cairns group of mainly southern hemisphere agricultural producers is lobbying hard against the subsidies of the North, which make their exports uncompetitive in Europe or the US if they are allowed in at all.

But US steel makers also want to be protected against cheap imports from the European Union (EU), while developing countries want to be protected against cheap clothing and textile imports from the East.

Add the fact that developed countries want "new" issues - such as intellectual property rights, trade in services such as tourism and banking, and labour and environmental standards - thrown into the pot, and one can see why there are problems in world trade talks.

There has also been a trend towards bilateral trade negotiations between, for example, the EU and South Africa; the US and its immediate neighbours; and now Sacu and the US.

Each is a microcosm of the larger WTO picture, with a sharper focus on individual vested interests.

South Africa is probably the most seasoned trade negotiator in southern Africa, especially after its long and tortuous negotiations with the EU. It is taking the other Sacu states - Botswana, Lesotho, Namibia and Swaziland - along with it on the talks with the US, because all five states have a common tariff structure and share a customs revenue pool.

Some MPs wanted to know why South Africa was not including all Southern African Development Community (SADC) states.

Carim explained that the other nine had their own tariff regimes and some belonged to other free trade agreements, such as the Common Market for Eastern and Southern Africa.

Apart from the fact that one of the SADC states was Zimbabwe - politically problematic for the US, to say the least - trying to reconcile all the different treaties and agreements would be a logistical nightmare.

Carim said the Sacu-US talks were important because Sacu was the first sub-region in sub-Saharan Africa with which the US was negotiating such a comprehensive trade agreement.

Key issues under discussion included agricultural and industrial trade (including textiles and apparel), standards, customs procedures, rules of origin, trade remedies, investment and services.

These negotiations would build on the US's African Growth and Opportunity Act (Agoa). Given that Agoa would expire in 2008, other agreements would have to take its place and the Sacu-US deal could show the way.

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