Deputy Minister talks between SACU, US cancelled, no new date set

A deputy ministers meeting meant to restart talks on a free trade agreement between the U.S. and the Southern African Customs Union were cancelled this week and efforts to reschedule the meeting were unsuccessful as of press time.

Deputy U.S. Trade Representative Josette Shiner was scheduled to meet South African Department of Trade and Industry Acting Director-General Tshediso Matona in Geneva on May 15. But that meeting was cancelled after new USTR Rob Portman tapped Shiner for another project, according to SACU officials.

The U.S. then tried to move up the date of the meeting to May 14, but SACU ministers could not make that date because they are negotiating with the countries of the Mercosur trading bloc through May 13 and need at least a day to consult among themselves before meeting with the U.S., one official said.

A teleconference was scheduled between the two sides for May 4, but an article published that same day by the South African government news service, BuaNews, quoted Matona as saying the talks had stalled over U.S. demands in investment, government procurement and competition. The news service reported that the two sides had agreed to a deal that would only cover market access on goods and services. South Africa's Government Communications and Information System agency publishes BuaNews.

As a result of the article, the USTR staff setting up the teleconference asked the SACU ministers to once again commit themselves to a comprehensive agreement, according to SACU officials. SACU staff said the call should only establish the next deputy minister meeting and should not include a discussion of the substance of the agreement, these sources said. As a result, the conference call between Shiner and Matona did not take place and no new date has been set.

Under a December agreement reached by then-USTR Robert Zoellick and African trade ministers, deputy ministers were to meet within the first two months of 2005 to agree on a timetable and specific actions aimed at moving the negotiations between the U.S. and South Africa, Lesotho, Botswana, Namibia and Swaziland.

The talks have been deadlocked since Shiner met with South African Director General for Trade and Industry Alistair Ruiters in Paris last July, in part because the two sides disagreed on what should be covered in a FTA. The U.S. has pushed for a comprehensive agreement covering investment, labor, intellectual property, government procurement and services, while SACU negotiators were calling for an 'early harvest'agreement covering market access first and leaving other chapters for later discussions (Inside U.S. Trade, Dec. 10, p.9).

Separately, the U.S.-SACU FTA Coalition sent a letter to Portman on April 27 reminding him of the private sector support for the agreement, despite the obstacles the talks have faced on both sides, which the group says are not insurmountable.

'From the outset, it was clear these negotiations would be unique and would present a number of significant challenges. This has certainly proven to be the case,' according to U.S.-SACU FTA Coalition Chairman Will Stephens. 'Both sides have limitations, real and strategic, to what they are able to do.'

A copy of the U.S.-SACU FTA Coalition letter is available online to subscribers of Inside U.S. Trade's electronic news service World Trade Online at www.insidetrade.com