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US, SA union fail to reach consensus on free trade


US, SA union fail to reach consensus on free trade

April 18, 2006, 17:15

The US government and the Southern African Customs Union (Sacu) have failed to reach consensus regarding the establishment of a free trade agreement. The parties met in Pretoria today.

Unrealistic demands by the US government are said to be at the centre of the failed talks. The parties have, however, agreed to set up a framework for future negotiations. Analysts have, however, warned that should the US fail to backtrack on some of its conditions, the deal will remain a far fetched dream.

The US government’s announcement that it is not going to compromise on any of the three identified areas of trade appears to be a hurdle too high to jump for their prospective partners, Sacu. The US congress has mandated Karan Bhatia, its deputy trade commissioner, to ensure that the deal must include Intellectual Property Rights, Government Procurement Rights and Investment.

Sacu, which consists of South Africa, Namibia, Lesotho, Botswana and Swaziland, has not done much trading in these areas, in fact the union is still in the process of putting together internal policies to govern these areas of trade. The US trade envoy has acknowledged that this is a major challenge.

Doubtful of deal being reached

Trade pundits are doubtful that any deal will be reached soon. They believe that Washington’s so called "golden standards of trade relations" are just too high for sub-saharan Africa.

Nkululeko Khumalo, a senior researcher on trade policy at the South African Institute of International Affairs (Saiia), says the fact that Sacu is yet to get its house in order in terms of harmonising trade policies, is reason enough for negotiations to fail. However, the biggest impediment, says Khumalo, is that we have a developed big industrialised economy like the US, trying court developing countries such as South Africa and poor countries like Lesotho.

Khumalo says the US is racing against time because its Trade Promotion Authority will soon expire, so they actually need to seal this free trade agreement with Sacu as soon as possible. Since it has already become apparent that an agreement is unlikely going to be reached, Khumalo says the parties will have to arrange another meeting, while they consult with their various authorities.

 source: SABC News