An impasse in free trade talks between the Southern African Customs Union (Sacu) and the United States is unlikely to be resolved before the US presidential elections, a South African official said on Wednesday.
”The political climate leading up to elections may not lend itself to any material shift in US positions,” Department of Trade and Industry chief director Iqbal Sharma told reporters in Pretoria.
The presidential poll is to be held on November 2.
Sharma expressed concern that the Sacu-US talks, which he said are at a crossroads, may not be concluded by the year-end deadline.
After six negotiating sessions, the two sides remain far apart, he said.
”To bridge the gap, the US as the far more developed partner would have to translate into reality its stated political commitment to asymmetry and special and differential treatment.
”Failing a quick compromise, it will be difficult — if not impossible — for the negotiators to meet their deadline and conclude the negotiations this year.”
Sharma said the US has failed to translate into practice its stated commitment to recognising the different levels of development between the US and Sacu. Unless this fundamental problem is resolved, there is little hope for the negotiations succeeding.
But, Sharma said, Sacu is not compelled to agree to anything.
”In the context of America’s foreign policy agenda, Africa is very high up there. The Americans want this deal probably more than we do. They’ve been losing out to their principle competitor, the European Union, in access to this market.”
Sharma said Sacu will focus more on boosting trade and investment links with developing countries, as greater gains stand to be made.
”These linkages have greater potential for mutually beneficial economic development.”
To this end, Sacu will embark on negotiations with India to reduce barriers to trade and investment. India is the 14th-largest manufacturing economy in the world, the 11th-largest economy in terms of gross domestic product and the fifth largest in terms of purchasing power parity.
India has a middle-class consumer market of more than 300-million people and is one of the world’s major poles of demand, Sharma said.
Sacu has also agreed to enter into free-trade talks with China, which should start in the fourth quarter of this year and last for 18 to 24 months. Last year, China was rated the second-largest economy in the world, after the US.
Sharma was confident that free-trade negotiations with the South American customs union Mercosur and the European Free Trade Area (Efta) will be concluded early next year.
The Efta talks on market access were initially due to be concluded this year, but the fourth round of talks was cancelled.
”Difficulties may arise in the context of agricultural discussions at the state level. However, there is an optimistic outlook for conclusion in early 2005,” Sharma said.
Turning to ongoing World Trade Organisation negotiations, he said there seems to be some proposals from Europe that may advance the discussions, ”but it is hard to say right now”.
If no agreement is reached at the World Trade Organisation’s general council meeting next week, it will cast a dark cloud over the stalled Doha round of global trade talks, Sharma added. — Sapa