A free trade agreement (FTA) with the United States will have a range of benefits for ordinary South Africans and would also make the country “more attractive” as a foreign investment destination, said John Taylor, the US Under Secretary for International Affairs in the Treasury.
Briefing the media in Cape Town on Thursday — after meeting South African Finance Minister Trevor Manuel — he said the agreement would stimulate employment in South Africa as the barriers to trade would be lowered. He was confident that the agreement would be completed “by the end of the year”.
Taylor predicted the cost of imported capital goods would — as a result of the agreement — become cheaper and the market for South African exports would be enhanced. He said this would be particularly beneficial to the agriculture and textile industries.
Praising South Africa for its sound macro-economic policies, he welcomed its “market-determined” currency exchange rate and inflation targeting regime and said South Africa had enjoyed a high growth rate.
Taylor — who said his government was exploring ways of assisting South Africa with its mortgage assistance programme — would be visiting Alexandra township, a black residential area in Johannesburg, on Friday as part of his tour. The US was looking “at how best to help”.
Asked if there had been discussions with Minister Trevor Manuel concerning the legislative environment in the labour field, he said this had not specifically been part of discussions.
However, he said the experience with Nafta — the North American Free Trade Agreement — was that a number of barriers to trade were lowered over a five to fifteen year period.
Responding to objections from the Congress of South African Trade Union to Wal-Mart — the US mass retailer — entering the South African market, he said this had not specifically been discussed. But the experience was that large retail outlets of this kind had found ways “of bringing costs down”.
He said there had been a “a big change here [in Africa]” regarding the importance of opening markets and allowing the private sector to foster job creation. He said the Bush government had promoted grant funding for poorer states rather than encouraging loan expansion.
Asked about the impact of higher oil prices on the world economy, he said that the world market had become “more resilient” to higher prices and more flexible by finding alternative sources of fuel and reducing consumption. – I-Net Bridge