Organised business is tempering its expectations as a new round of trade discussions between the SA and the US government gathers momentum, with Business Leadership SA CEO Busi Mavuso warning that uncertainty in Washington could complicate progress.
Senior government officials including trade, industry and competition minister Parks Tau and international relations and co-operation minister Ronald Lamola, have laid the groundwork for the new round of negotiations ahead of this week.
President Cyril Ramaphosa is expected to hold bilateral talks with US officials and other world leaders and US business leaders this week, on the sidelines of the UN General Assembly debates in New York.
Though this is a positive development in SA’s bid to reset its relations with its second-largest trading partner, Mavuso says business as well as political decisionmakers must plan for all scenarios.
“In those in which we do not reduce any of the punitive US trade barriers, or indeed even see heightened measures, we have little alternative but to focus efforts to build trade relations with the rest of the world,” she said in her weekly newsletter on Monday.
“Mutual recognition arrangements such as those signed in July with India and the UK, ease customs and border procedures, removing trade frictions. The Brics arrangements also offer enhanced trade and investment opportunities as well as better advocacy for a fairer global trade system. There is also much we can take forward out of the B20 process, particularly the trade and industrial transformation recommendations including deeper regional trade through the AfCFTA and the adoption of green and digital technologies to re-energise manufacturing.”
The US has raised tariffs on SA goods while SA’s Agoa eligibility faces expiry from September unless renewed. This is unlikely as the 30% tariff on SA exports nullifies the country’s preferential access to US markets under Agoa.
Pretoria has signalled that while it wants to expand economic ties with the world’s largest economy, it is also preparing contingency plans should talks falter.
“The DTIC is also preparing a mission with SA companies to Indonesia, Vietnam and Malaysia next month as part of its broader efforts to promote new trading corridors. These efforts are well-supported by business and reflect a global structural shift as countries elsewhere simultaneously attempt to reduce their exposures to the US economy. As a country, we must grasp every opportunity to build new markets.”
Ramaphosa and senior ministers are expected to continue diplomatic and trade discussions in New York, where meetings with senior US officials and business leaders are scheduled. Pretoria is seeking to reset relations with Washington after a period of strain.
During his address at the UN General Assembly debate this week, Ramaphosa is also expected to reiterate SA’s call for UN reform: “Proposals to expand the permanent membership of the Security Council, improving regional representation and restricting the use of the veto, have stalled and must be reinvigorated with urgency.
“At a time of widespread poverty and underdevelopment, when human rights are under threat worldwide and where geopolitical tensions are creating instability across the globe, advancing multilateralism is more critical than ever,” the president said in his newsletter on Monday.
“The UN is struggling to meet its mandate as contained in the UN Charter. It continues to be hampered by competing national interests that impede collective action. There is a lack of political will among member states to address many challenges, including the chronic underfunding of peacekeeping operations.”
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