Bridges Weekly Trade News Digest • Volume 13 • Number 20 • 3rd June 2009

US, SACU Anticipate Future Cooperation on Trade

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Trade negotiations between the United States and the members of the Southern African Customs Union (SACU) have picked up speed in the past few months, contrary to some recent news reports, a USTR source confirmed on Wednesday. Support from the new US and South African Administrations, as well as continued collaboration from the other SACU members, has provided a “new opportunity to advance co-operation,” the source said.

Free trade negotiations between the US and SACU – which includes South Africa, Botswana, Namibia, Lesotho, and Swaziland – were mutually suspended in 2006. Since that time, the trading partners have actively pursued a Trade, Investment, and Development Cooperative Agreement (TIDCA), which was signed in July 2008. “Everyone was disappointed the free trade agreement did not bear fruit, but [the US has] a positive relationship with SACU,” the USTR source stated. “The TIDCA is a significant agreement.” With the TIDCA in place, the trading partners expect to make further progress under the new administrations.

The TIDCA is a framework agreement that establishes a forum and guiding principles for parties to discuss trade and investment. This US-SACU agreement places special emphasis on technical barriers to trade, customs co-operation, sanitary and phytosanitary measures, and trade and investment promotion. Under the TIDCA framework, the parties will establish working groups to reach trade arrangements in these areas.

The United States originally proposed the TIDCA as an intermediary step toward a free trade agreement. After talks stalled between 2004 and 2006 over the FTA’s scope, US negotiators hoped that this mechanism would help the trading partners find middle ground and eventually reach a more comprehensive deal. In 2006, the US and SACU mutually decided not to continue negotiations for a free trade agreement due to irreconcilable differences over intellectual property protection, government procurement, and trade in services.

“After four or five rounds of negotiations it became increasingly apparent that we were approaching this through very different lenses,” US Trade Representative Ron Kirk said of the earlier negotiations in an interview with Bloomberg News last month.

SACU member states already benefit under the Africa Growth and Opportunity Act, a Clinton initiative that allows some of the region’s exports to enter the United States duty-free. During 2008, the United States and SACU traded US$ 17.9 billion worth of goods. SACU is the United States’ largest trading partner in Africa.

ICTSD reporting; “U.S., Africa Lower Trade Expectations,” THE JOURNAL OF COMMERCE, 29 May 2009; “Southern Africa: No Trade Agreement between SACU and U.S.,” ALLAFRICA.com, 28 May 2009; “US Will Not Reopen SACU Trade Deal Talks,” BUSINESS DAY, 12 May 2009; “U.S. to Limit Scope of Southern Africa Trade Talks, Kirk Says,” BLOOMBERG, 11 May 2009.