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US, SACU trade talks proves far-fetched

Southern Africa: US, SACU Trade Talks Proves Far-Fetched

Namibia Economist (Windhoek)

April 21, 2006

The United States hoped to seal a range of deals with southern African countries to boost investment in the region this week but would not budge on key issues that had previously stalled talks.

Reports from South Africa quoted the Deputy US Trade Representative Karan Bhatia saying a broader trade pact with the five-member Southern African Customs Union (SACU) was still far off, but he hoped to agree on a road map with southern Africa on reaching a trade pact this week. Talks between the US and southern African nations about signing a free trade agreement (FTA) that would give them more access to the world’s wealthiest economy have stalled since 2003. Bhatia said while the two sides had failed to break an impasse on a number of issues, his country wanted to find other ways of kick-starting investment in southern Africa.

"I think coming in, it’s fair to say there was concern our trade and investment dialogue with SACU countries had stalled," he reportedly told reporters after talks with SACU representatives. "...we’ve agreed on a plan for how to move forward that’s going to lead hopefully to near-term positive results for our bilateral relationship and going to help set in place the building blocks to reach a free trade agreement ... in the longer term."

He said this would include agreements that would "smooth the flow of goods" between the region and the US. SACU consists of South Africa, Botswana, Namibia, Swaziland and Lesotho. The five countries already have duty-free access to the U.S. market for most of their exports under the African Growth and Opportunity Act (AGOA).

Bhatia however said the US would not compromise on issues like intellectual property, government procurement and investment, which are important for American companies doing business on the continent, but which Africans say are too difficult to enforce.

"We are willing to work with SACU to arrive at a mutually acceptable solution but we are not willing to compromise on the ambition of our FTA, generally on the fact that it needs to be comprehensive,"Bhatia said. SACU member states have accused the US of being inflexible by refusing to budge on the so-called "new generation" issues which effect US exports to the region that tend to focus on services or high technology goods.

Unrealistic demands by the US government are said to be at the centre of the stalemate of the talks. Analysts have, however, warned that should the US fail to backtrack on some of its conditions, the deal will remain a far fetched dream.

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.