Trade deals or raw deals for SA?

The government-supported trend in South Africa over the past two decades has been to go for trade pacts – either unilateral agreements by SA alone, or as part of the Southern African Customs Union (Sacu) consisting of Botswana, Lesotho, Namibia, SA and Swaziland. But almost two years ago, an SA parliamentarian representing the ANC said government must stop rubberstamping trade deals. In a candid statement, Sisa Njikelana said parliamentarians had in the past not been “robust” enough in ensuring that trade talks delivered on developmental priorities. He admitted that SA parliamentarians had been “rumbling and grumbling about always getting the cake already baked when it comes to trade agreements”, meaning they only become aware of the content of these agreements when they have been finalised. The original trade agreement in which SA was a signatory was the 1999 SA-European Union (EU) trade, development and co-operation agreement (TDCA). This now deals with “substantially all trade” between the two partners, including trade in agricultural products, but Stephen Greenberg – a policy researcher at the Environmental & Development Agency (EDA) Trust – said the trade pact was a “raw deal” for SA. “The SA government approached the negotiations with two misconceptions,” he said. “The first was that global trade liberalisation was a fait accompli that SA must accept. Integration into the global economy was the only option. “The second misconception was that trade liberalisation was beneficial to most, if not all SA citizens.” But, Greenberg added: “These misconceptions need to be dispelled.” Another signed and sealed deal is the trade agreement between Sacu and the European Free Trade Association (Efta) states. But in the process are a number of other agreements, including the proposed SA absorption into Bric. First is one that would include a tie up with Brazil, the first name in the Bric quartet. That’s a preferential trade agreement (PTA) between Sacu and the Common Market of the South (Mercosur), consisting of Argentina, Brazil, Paraguay and Uruguay that has been on the go since 2004, and originally accepted to be a precursor to a full free trade agreement (FTA). The latest information on that is that the PTA agreement has still to be finally ratified by the countries’ parliaments. Another hoped for, but still lingering, deal is the US-Sacu trade deal. In March last year a senior US trade official said that it was not “dead and buried”, but was progressing at a slower pace “than one would like to see”. This, he added, was because the US was having to deal with each of the five countries that make up Sacu. Towards the end of last year, India and China also entered the trade agreement scene with SA. SA and China inked a series of trade and energy deals during a bilateral trade commission co-chaired by visiting Chinese vice-president Xi Jinping and SA deputy president Kgalema Motlanthe in Cape Town. The success of SA’s new growth path required the support of partners such as China, Motlanthe told reporters. “We see the future destiny of our two countries as inextricably linked with the African continent.” Also India and Sacu were expected to sign a trade pact by the middle of this year, which aimed at reducing tariffs on certain items traded between the nations, commerce and industry minister, Anand Sharma, told visiting Indian journalists in SA. “We both are pushing it (PTA agreement) very hard and want to complete it at least by the middle of the year,” he said. The agreement will help the countries reduce the customs tariffs for certain products.