Deal expected by 2004 Alan Peat NEGOTIATIONS FOR a Free trade agreement (FTA) between the Southern African Customs Union (Sacu) and the US are due to start at the end of next month and the deal is expected to be signed at the end of 2004. Trade consultant Duncan Bonnett of Whitehouse & Associates agrees with trade minister Alec Erwin that an FTA is better than the US’s Africa Growth and Opportunity Act (Agoa), because it will be a give industries long-term assurance and cannot be changed at will by the US administration. “The thing about Agoa is that it is unilateral and not reciprocal and the US makes the stipulations and is the arbiter,” he said. “It is not governed by the conditions laid down by the World Trade Organisation (WTO) as an FTA would be. “It takes the sting out of the tail that if any Sacu country doesn’t comply with US political ambitions in the region that they could be booted out of Agoa. Not so with an FTA. “Post 2008, when Agoa is due to end (although it has been suggested that it could go on longer), companies that have set up manufacturing plants to take advantage of Agoa will be able to breathe easier that things will continue under an FTA.” Also, Bonnett does not see SA putting its head on the block over the detail of an FTA. “Our guys have been round the block with the European Union and SADC agreements, for example, and so they know the games that negotiators can play.” However, Bonnett does not see any sneaky tactics being employed by the Americans to gain unfair advantage for their own exports into the Sacu market. “You will obviously face increased competition from US goods,” he said. “But - with their economies-of-scale - they can already compete very effectively under present conditions.” The Sacu agricultural industry, however, is an area where “we have to dig our heels in” and not just let cheap, subsidised US processed foods flood our markets, Bonnett added.
