All sectors of the region’s economy could jointly gain from a free trade agreement (FTA) to be negotiated between the United States and the Southern African Customs Union (Sacu), Trade and Industry Minister Alec Erwin said on Monday.
”The five economies (those of Sacu members, South Africa, Botswana, Namibia, Lesotho and Swaziland) could benefit from this over a very wide range of industries,” he told reporters in Pretoria.
Erwin and his four counterparts from the other Sacu member states met US Trade Representative Robert Zoellick earlier on Monday to discuss the FTA.
Formal negotiations about the FTA are due to start sometime next month. Erwin and Zoellick said it was hoped the agreement could be concluded before the end of next year.
”We hope to implement it as soon as possible after its conclusion,” Erwin said. Once finalised, it still had to be ratified by the countries involved, he added.
Erwin said a very comprehensive agreement was envisaged. ”It will cover all issues of economic importance.”
Some 38 countries currently benefit from America’s Africa Growth and Opportunity Act (Agoa), which was signed into law by then president Bill Clinton in 2000.
The act affords improved access to US markets for nearly 2000 products for African countries that abide by certain conditions of market reform and good governance. However, Agoa expires in 2008.
Erwin said Sacu believed the positive experience in the region regarding Agoa should be consolidated and made into a more permanent agreement with the US.
”We saw through the Agoa process. It is quite possible to see the joint economies benefit.”
On the question of what the FTA would add to Agoa, Zoellick said the agreement would move beyond trade, and also emphasise growth and development. It would look into the benefits of Agoa and build on them.
The US presented the largest market in the world in terms of gross domestic product. It was hoped the agreement would promote other investment as well. It would create a good trade framework that could help improve the investor climate, he said.
”It will help Sacu’s own regional integration.”
Especially the smaller countries in the region needed to be part of a larger economic system to benefit, Zoellick said. He said the US hoped to support some reforms in African economies that could ensure long-term growth. That could, for example, include greater expansion into the service industry.
”We hope the FTA can help create a deeper economic partnership and address some of the fundamentals any democratic government may want to address.”
Among these was dealing with poverty.
”We might be able to create a model about trade and development linked to hope.”
Trade between the US and Sacu stood at almost $8-billion. A similar agreement the US concluded with Canada and Mexico had resulted in a doubling and even tripling of trade figures, Zoellick said.
On how the FTA with Sacu could benefit the US, he said: ”We believe this region is very important economically. We see it as a trade partner.”
South Africa already had an agreement with the European Union. ”We hope to level the playing-fields.”
Zoellick said the US would listen to Sacu members’ concerns. Sensitivity about the size of the US economy, compared to that of the Sacu countries, had to be taken into account.
”At the end of the day our goal is to create jobs and growth here as well as in the United States.”
According to Zoellick, the pact would create tremendous opportunities for sub-Saharan Africa. But, he added: ”Ultimately it has to be done by Africans themselves. We can create opportunities.” The age of dependency in Africa was over, he said. ”We can’t do things for everybody else.”
The FTA would fit in with the framework of the New Partnership for Africa’s Development (Nepad), Zoellick said.
”It’s a way to create a concrete example of what those principles are about.”
Erwin said: ”It will send a very clear message about the kind of partnerships that should be built between developed and developing economies.” – Sapa