Business Report (South Africa)
US all-or-nothing position derails free trade talks
November 16, 2006
By Michael Hamlyn
Cape Town — Negotiations towards a free trade agreement with the US have "all but come to a halt", according to Tshediso Matona, the director-general of the department of trade and industry (dti).
He told the portfolio committee on trade and industry in parliament yesterday: "We have agreed with the US that it is not possible to conclude an agreement right now." But he added that the department was still committed to concluding a beneficial trade agreement with the US.
Questioned by MPs on the reasons for the hold-up, Matona explained that the terms and conditions on which the Americans wanted to conclude an agreement were not friendly to the policies of the South African government.
"The US approach is not developmental," he said. "When we engage in trade negotiations through the World Trade Organisation, we make the point that countries must open their economies to the extent that their economies are able to cope. We want to be able to phase in liberalisation, and exempt certain items.
"They want free trade now and they want everything. They want to retain the right to subsidise their agriculture. They have a template-based approach. One of their agencies conceded: ’We don’t want to negotiate. We put a paper down and show you this is where you sign.’"
In response to Matona’s remarks, US embassy spokesperson Mark Schlachter said: "Our comprehensive free trade agreements with other developing countries have proven to be trade-expanding and beneficial to all parties. For two years, the US and the Southern African Customs Union worked hard to negotiate a free trade agreement.
"Both sides were disappointed that an agreement with the scope and content of a free trade agreement could not be reached. We are now pursuing other avenues to expand our trade relationship."
Matona told the committee that instead of concluding such an agreement the South African government planned to create a trade and investment framework that would enable officials to deal with problems as they arose.
However, he also suggested that last week’s striking victory of the Democratic Party in mid-term elections might help start talks again. "Political developments may make it easier to resume these negotiations," he said.
Matona told MPs that negotiations with other trading partners were, however, still proceeding.
Sectoral talks with the EU to open access to the European market for local automotive products were going on.
And trade and investment protection talks were being held with Middle Eastern countries, an area which is being particularly targeted for South African investment.
MPs also heard that vacancies at the dti had been reduced, but more than a quarter of posts were still unfilled.