South Africa Facing a Critical Year' Over World Trade Talks

Posted 08 January 2007 @ 01:49 pm EET     Print     Reprint     E-Mail     Comments

JOHANESBURG (IBTimes.com) - The trade and industry department says this will be a critical year for SA's trade negotiations in the international arena, marking out the country's parameters in international trade relations.

Deputy Minister of Trade and Industry Rob Davies said on Thursday these parameters would be determined by the outcome of talks on three trade treaties.

This involves the possible revival of the collapsed Doha round of World Trade Organisation (WTO) talks; the further economic integration of the Southern African Development Community (SADC); and the economic partnership talks between the European Union (EU) and several southern African states.

Davies said WTO director-general Pascal Lamy was trying to revive the Doha talks. However, Lamy had conceded that there was not much optimism about the success of the project. Talks on the issue would take place on the fringes of the World Economic Forum due to take place in Davos in the next few weeks.

"In three months we will know whether the negotiations will proceed or whether they will go into hibernation until after the next US presidential elections at the end of 2008," Davies said.

"The ball is now in the court of the US administration as to whether they can come up with a better offer on agricultural support," he said.

On economic integration of the SADC, Davies said the critical question for negotiators this year was whether the integration should proceed on the basis of a negotiated external tariff common for all member countries, or whether it would target a free trade area internally but with each country having its own external tariff system.

If the latter option was chosen, the economic system would be built on the foundations of the existing Southern African Customs Union.

A decision on the way forward would have to be taken this year, Davies said. The talks would be based on resolutions agreed to at the summit of SADC heads of state in Maseru last August.

The summit agreed to the establishment of a free trade area by next year, a customs union by 2010, a common market by 2015, monetary union by 2016 and a single currency by 2018.

Davies said most countries, with the exception of Angola and Democratic Republic of Congo, were on board for the completion of a free trade protocol by next year.

It was hoped that the completion of political changes following the successful Congolese elections of Joseph Kabila paved the way for that country's effective participation.

Issues that the SADC still had to thrash out included how to deal with rules of origin and the removal of duties on sensitive products. However, Davis said, there were "huge question marks" over the 2010 deadline for a customs union.

The third set of negotiations that would come to a head this year related to the economic partnership agreements between the EU and six regions of Africa, the Caribbean and the Pacific which were due next year.

SA has pushed for an alignment between the proposed EU agreement with some Southern African countries and its own free trade agreement with the EU. It wants a single trade deal to govern all trade between the EU and the SADC as this would contribute to regional integration.

The EU has been negotiating an economic partnership agreement with the SADC since 2004, but SA is not part of the negotiations because of its existing free trade agreement with the EU.