Bridges Weekly Trade News Digest • Volume 6 • Number 39 • 14th November 2002
USTR Proposes New FTA With South African Nations
On 4 November, US Trade Representative (USTR) Robert Zoellick informed Congressional leaders of the Bush Administration’s intent to begin negotiations in the hopes of forming a free trade agreement (FTA) with the countries included in the South African Customs Union (SACU): Lesotho, Botswana, South Africa, Namibia and Swaziland. The negotiations are expected to commence in approximately three months. In regards to the potential agreement, Zoellick has said that "[the Administration is] responding to Congress’ direction, as expressed in the African Growth and Opportunity Act (AGOA), to initiate negotiations with interested beneficiary countries to serve as the catalyst for increasing free trade between the United States and sub-Saharan Africa and for increasing private sector investment in the region." Some civil society groups, however, are questioning the US’ intentions behind the initiative.
According to the USTR, an FTA with SACU, already the US’ largest sub- Saharan African export market, would likely enhance both US political and economic links to the African region and lead to spurred development. SACU accounts for up to USD 3 billion in exports a year, and in 2001, combined two-way trade between the US and the region was estimated at almost USD 8 billion. One media source indicates that the South African business community in the US is pleased with the initiative.
Zoellick informed the Speaker of the House and the President Pro Tempore of the Senate of the Administration’s intentions to maintain continuous consultations with Congress around the the SACU FTA, and sent a similar letter to Senator Robert Byrd (D). In the letter to Byrd, Zoellick outlined a number of major issues relating to the Administration’s intentions, including an interest to develop American trade interests, compete with the advantageous trade relationship the EU has with Africa, and connect enhanced trade with development of the SACU region. The letter goes on to express an interest in increasing regional integration, developing intellectual property rights regimes, and in decreasing impediments to American service firms.
American intentions scrutinised
Larry J. Goodwin of the Africa Faith & Justice Network believes that language in the letter to Senator Byrd indicates that the Administration plans to push access to the region for US genetically modified organisms (GMOs) through the agreement. The letter states that the US will "seek to eliminate non-tariff barriers in SACU countries to US exports, including…unjustified trade restrictions that affect new US technologies" and "eliminate SACU country practices that adversely affect US exports of perishable or cyclical agricultural products."
Goodwin also interprets the letter as saying that American subsidies would be protected under an intended agreement, while African subsidies would not. The US, according to Zoellick’s text, will "pursue a mechanism with SACU countries that will support achieving the US objective in the WTO negotiations of eliminating all export subsidies on agricultural products, while maintaining the right to provide bona fide food aid and preserving U.S. agricultural market development and export credit programs." Mr. Goodwin believes that the reference to "bona fide food aid" could also relate to the GMO issue.
In related news
Last week, at a ministerial conference between the Southern African Development Community (SADC) and the EU, the EU announced plans to grant SADC EUR 101 million in an attempt to improve the economic integration of various sectors in the region, including trade, communications and transport. SADC is made up of nine members, including Angola, Botswana, Lesotho, Malawi, Mozambique, Swaziland, Tanzania, Zambia and Zimbabwe and works to improve development, economic growth, and alleviate poverty amongst other goals in the region.
For further information, see:
http://www.ustr.gov/releases/2002/11/2002-11-04-SACU-byrd.PDF and http://www.sadc.int/english/news/mr21_07112002.html.
"Zoellick Launched Negotiations With Southern African Customs Union," AFRICA FAITH AND JUSTICE NETWORK, 7 November 2002. " USTR Notifies Congress Administration Intends to Initiate Free Trade Negotiations with Sub-Saharan Nations," USTR, 5 November 2002," Letter to Senator Byrd," USTR, 5 November 2002. "EU grants €101m to strengthen economic integration in SADC," DOW JONES, 12 November 2002," US formally launches SACU free trade proposal," BUSINESS DAY, 7 November 2002.