South Africa: trade beat
Business Day, South Africa, 3 October 2005
TRADE BEAT
TRADE talks appear to have picked up pace in the latter part of the year. SA has another free-trade deal in the bag and talks with the US are scheduled to resume after a year-long stall. Carli Lourens reports
DOHA DEVELOPMENT ROUND
SA and other developing countries are eagerly awaiting the response of the world’s rich nations to a recent proposal on agriculture, submitted by the Group of 20 (G20) alliance of developing countries.
SA’s chief trade negotiator, Xavier Carim, said the G20, of which SA is a member, expected the US and European Union among others to respond some time this month. These responses were likely to give an indication of what could be achieved at the Sixth World Trade Organisation ministerial conference in Hong Kong in December.
Southern African Development Community members and the G20 recently met separately to assess the developments to date, partly in preparation for Hong Kong.
Agriculture remains the key stumbling block, delaying the completion of the Doha Development Round - which was scheduled for completion in December last year.
US
Negotiations between the Southern African Customs Union (Sacu) and the US were schedule to resume in Gaborone on Thursday last week, after The SA Exporter went to print.
This followed a year-long stall that set in after serious differences of opinion emerged between the two sides last year. In a bid, in August, by high-level officials to bring the talks back on track, it was decided that discussions would resume in bite-sized chunks.
According to Carim, the main focus of the first new discussion session would be on industrial products, while negotiators would also explore avenues of common ground in other areas.
Talks were initially scheduled for completion in December last year.
EUROPEAN FREE TRADE ASSOCIATION (Efta)
A free-trade agreement between Sacu and Efta, which comprises Switzerland, Norway, Iceland and Liechtenstein, has been concluded after a long wait.
The bulk of the deal was completed in December last year. A small number of outstanding issues were concluded late in August, bringing negotiations to a close.
Trade ministers from both sides were expected to ink the deal in the next few months. Carim expected the deal to be ratified by the nine countries involved by July next year.
The agreement gives Sacu exporters of industrial goods and fish products duty-free and quota-free access to Efta countries.
Carim expects the agreement to be a boon for the beleaguered clothing sector, which will not only enjoy duty- and quota-free access to Efta markets, but will also benefit from relaxed rules of origin. This means clothes makers will be able to import fabric from low-cost producing countries, such as China, produce clothes locally and ship these to Efta countries, which are small but wealthy markets.
Carim said Sacu could not secure the substantially better access it had aimed to achieve for exports into Efta’s highly protected agricultural markets. Although, Sacu exporters of agricultural products now had better access than before, he said.
MERCOSUR
A meeting has been scheduled for the third week of this month in Uruguay to resolve a small number of outstanding issues following the conclusion of a preferential trade deal with Mercosur in December last year. The Latin American trade bloc comprises Brazil, Argentina, Uruguay and Paraguay.
The main outstanding issue involved rules of origin.
INDIA, CHINA
Talks around a trade deal with India were scheduled to kick off last month, but a change in the Indian administration prompted a request by that country to postpone the meeting. A new date had not been set by late last month.
The meeting, which was to have taken place in Pretoria, was expected to have mapped out a working schedule for negotiations between Sacu and India. The two sides are aiming to initially conclude a preferential trade deal. This is a scaled-down version of a free-trade deal.
Sacu would consider starting free-trade talks with China following the outcome of studies into the effect of such a deal. These negotiations are expected to be completed towards the end of the year.
OTHER
Sacu wants to identify a free-trade partner in Africa by year-end. A number of other countries, such as Singapore, Thailand, Sri Lanka and Turkey, have expressed interest in free-trade pacts with Sacu.
