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Southern Africa: Customs Union Signs U.S. Trade Deal
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Business Day (Johannesburg)
18 July 2008
Posted to the web 18 July 2008
Mathabo Le Roux
Johannesburg
THE Southern African Customs Union (Sacu) signed a co-operative trade agreement with the US on Wednesday in a bid to strengthen trade and investment ties and boost development of the southern African region.
In terms of the agreement, a consultative team on trade and investment will explore further trade and investment opportunities between Sacu -- Bots-wana, Lesotho, Namibia, SA and Swaziland -- and the US, remove obstacles to trade, and dedicate resources to trade facilitation.
The parties will also co- operate on sanitary and phytosanitary standards , technical barriers to trade and customs co-operation .
The Trade, Investment and Development Co-operation Agreement (Tidca) was signed in Washington by US trade representative Susan Schwab and Sacu representative countries.
Bruce Neuling, deputy economic counsellor for the US embassy in Pretoria, said the Tidca showed that the US and Sacu were committed to expanding their economic relationship.
"Tidca will focus on specific issues and projects. We will look for ways to promote two-way trade and investment and will identify and address specific impediments to trade and investment. We will promote contacts between the private sectors in the US and Sacu."
Neuling said there would not be a rigid agenda. "Tidca will contribute to economic growth in Sacu by encouraging exports and investments," he said.
Trade commentators were sceptical about the potential benefit of the pact, lamenting the low level of ambition in bilateral relations between Sacu and the US.
"The agreement has no meat. There will be no economic benefit," said Tsidiso Disenyana, deputy project head of development through trade at the South African Institute of International Affairs.
Sacu and the US launched negotiations on a free trade agreement about four years ago but talks were suspended because Sacu wanted to negotiate only a limited deal on market access, balking at the US's standard free trade agreement template, which also includes new generation issues such as services. Requirements on intellectual property rights -- a big issue for US firms -- was also deemed problematic.
Sacu argued that it did not have the capacity to deal with new generation issues, but Disenyana said Sacu could have been more ambitious in terms of service liberalisation. The issue of service negotiations has also been a persistent issue in bilateral trade negotiations with the European Union.
Schwab, at the signing of the Tidca, said the agreement would provide a framework for the US and Sacu to create the building blocks that could eventually lead to a free trade agreement .
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Sacu countries already enjoy duty free market access into the US on traded goods under the unilaterally extended Africa Growth and Opportunity Act .
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