South Africa: Trade Beat

Business Day, Johannesburg

South Africa: Trade Beat

By Carli Lourens, Johannesburg

5 September 2006

After a lull in the first half of the year, there appears to be movement on various fronts of SA’s trade agenda. Carli Lourens reports.

DOHA DEVELOPMENT ROUND

World trade talks are still suspended, but discussions over the struggle to make progress in the Doha Round continues.

By late last month, a Cairns group meeting had been scheduled. G-20 trade ministers also plan to meet in Brazil this month to "brainstorm on the status of the talks and the possible next steps", said SA’s chief negotiator Xavier Carim.

The G-20 meeting would look to develop a strategy to get the Doha Round moving again. World Trade Organisation (WTO)director-general Pascal Lamy had said earlier that he would restart the talks only if there was a change in the position of key players.

There was much concern a top political levels around the world about Doha’s lack of progress, said Carim. SA was using the suspension time to finetune its position also through consulations within the National Economic Development and Labour Council. Issues being discussed included industrial tariffs, antidumping, and harmonising positions among the Southern African Customs Union (Sacu), among other things.

The WTO, which is closed for a holiday period, resumes operations this month.

US

South African negotiators were scheduled to meet with Sacu partners Botswana, Lesotho, Swaziland and Namibia last month to decide how it would respond to a US proposal for a trade and investment cooperation agreement, which has been on the table since April.

Carim said his initial sense of the proposal was that it was "good". It would facilitate talks on a number of the main stumbling blocks in Sacu’s free trade talks with the US.

Such talks, which would not require either party to take a negotiating position, may see greater convergence between the two parties on some issues, Carim suggested. "We will be able to clarify and explore issues in a less pressured way," he said.

Asked why Sacu had not yet responded to the four-month-old US proposal, Carim said there had not been an earlier opportunity to consult regionally.

EUROPEAN FREE TRADE ASSOCIATION (EFTA)

The free trade agreement between Sacu and Efta, which includes Switzerland, Norway, Liechtenstein and Iceland, has been signed by all of the nine countries involved. It is now being prepared for ratification in the various Sacu and Efta member countries, said Carim.

He hoped that the ratification process would be completed by year-end, opening the way for the deal to be implemented at the beginning of next year.

MERCOSUR

Sacu and Mercosur negotiators met last week, after the Exporter went to print, to thrash out the final details of an expanded version of a preferential trade deal that was signed at the end of 2004. Negotiators had hoped that the expanded deal would be completed last week, but Carim said on the day before the meeting started that a further discussion may be required.

Mercosur was looking for increased access in areas that were sensitive to some Sacu countries, such as the automotive industry in SA and the beef and dairy industries in Botswana.

Mercosur is a large global player in all three of these areas.

Carim said Mercosur had narrowed its initial list of requirements for increased access in SA’s automotive industry, but he said there were still some concerns.

Carim said it was possible, however, that talks about non-product trade issues that formed part of the deal, such as rules of origin, may be finalised last week.

INDIA, CHINA

Sacu and India have agreed to meet this month with a view to start negotiations for a preferential trade deal. The two parties had hoped to start talks more than a year ago, but were delayed by several factors, mainly a change of administration in India.

Carim said they now hoped to start official negotiations before the end of the year.

Studies into the effects of a trade deal with China continued. There has been no progress towards a start date for a deal with China.

OTHER

A slew of countries are still interested in free trade agreements with SA.

Limited capacity, difficulties in finalising talks with the US, Efta and Mercosur, as well as SA’s focus on Doha talks have meant no progress has been made towards deals with other countries.

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