Five Southern African states could soon be dominated by the United States’s business interests.
Free trade talks start next month between the US and the Southern African Customs Union (Sacu) trade bloc of South Africa, Botswana, Lesotho, Swaziland and Namibia.
The African Growth and Opportunity Act was the opening salvo in a larger US trade campaign in Southern Africa. The US needs to expand markets and cut costs for its increasingly beleaguered economy, and analysts fear that US business will be the only victor if the US negotiators have their way.
The US has made its strategy clear. Last November Robert Zoellick, the US trade relations ambassador based in Washington, wrote an open letter to Senator Robert Byrd, then president of the Senate, confirming the rationale for the talks: ”The administration is committed to bringing back trade agreements that open markets to benefit our farmers, workers, businesses and families. With the Congress’s continued help, we can move promptly to advance America’s trade interests …
”In pursuing a negotiation with Sacu, we are responding to Congress’s direction, as expressed in the African Growth and Opportunity Act, to initiate negotiations with interested beneficiary countries to serve as the catalyst for increasing free trade between the United States and sub-Saharan Africa and for increasing private-sector investment in the region …”
Zoellick lists the prizes the US is targeting in the talks, which all benefit US business.
He says the US wants to eliminate tariffs and other duties and charges on trade between Sacu countries and the US ”on the broadest possible basis, subject to reasonable adjustment periods for import-sensitive products”.
Zoellick says the US also wants ”to eliminate non-tariff barriers in Sacu countries to US exports, including licensing barriers, unjustified trade restrictions that affect new US technologies and other non-tariff measures identified by US exporters”.
His long list of aims includes bringing Sacu’s customs systems in line with US requirements and breaking down any technical trade barriers.
”We want to ensure that US investors receive treatment as favourable as that accorded to domestic or other foreign investors in Sacu countries and to address unjustified barriers to the establishment and operation of US investments in those countries,” says Zoellick.
He says the US intends dealing with discriminatory and other barriers to trade in the Sacu countries’ services markets, and will pursue an ambitious approach to market access, including enhanced access for US companies ”to telecommunications and any other appropriate services sectors in Sacu markets”.
”We are seeking improved transparency and predictability of Sacu countries’ regulatory procedures, specialised disciplines for financial services, and additional disciplines for telecommunications services and other sectors as necessary.”
Zoellick makes it clear the US wants Southern Africa to have no competitive advantages. ”We seek to establish rules that reduce or eliminate artificial or trade-distorting barriers to US investment in Sacu countries, while ensuring that investors of Sacu countries in the United States are not accorded greater substantive rights with respect to investment protections than US investors in the United States, and to secure for US investors in Sacu countries important rights comparable to those that would be available under US legal principles and practice.”
The ambassador says the US wants to open up the region to electronic commerce and get heavily involved in tendering for government procurement. The US also wants trade remedies: a bilateral safeguard mechanism during the transition period, and no changes to US anti-dumping and countervailing duty laws.
US business will reap the fruits of a free trade agreement, but wants no part in ensuring that people and resources are not mercilessly exploited. Rather, it wants the Sacu governments to handle labour and environmental issues through enforcing laws.
Where US consumers are involved, the US wants a different set of principles to apply. ”The [free trade agreement] will take into account other legitimate US objectives including, but not limited to, the protection of legitimate health or safety, essential security, and consumer interests,” says Zoellick.
”We are committed to concluding these negotiations with timely and substantive results for US workers, ranchers, farmers, businesses and families by pursuing these specific objectives and the overall and principal US negotiating objectives set out in the Trade Act of 2002.”