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The TDCA and the Proposed SACU-USA FTA: Are Free Trade Agreements with Industrialised Countries

The TDCA and the Proposed SACU-USA FTA: Are Free Trade Agreements with Industrialised Countries Beneficial for the SACU? Mareike Meyn Institute for World Economics and International Management (IWIM), University of Bremen mmeyn@uni-bremen.de. Structure of the Presentation.

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The TDCA and the Proposed SACU-USA FTA: Are Free Trade Agreements with Industrialised Countries

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  1. The TDCA and the Proposed SACU-USA FTA: Are Free Trade Agreements with Industrialised Countries Beneficial for the SACU? Mareike Meyn Institute for World Economics and International Management (IWIM), University of Bremen mmeyn@uni-bremen.de

  2. Structure of the Presentation 1.SACU’s Trade Relations with the EU and the USA - Similarities and Differences 2. Motivations, Chances and Risks of a SACU-USA FTA 3. Topics that Need to be Addressed in a SACU-USA FTA

  3. South Africa’s trade balance with the EU (in million US$)

  4. EU – BLNS trade (in million €)

  5. SACU countries net exports to the USA (in thousand US$, customs value)

  6. SACU countries’ export volumes and main export products to the EU and the USA, 2001

  7. SACU countries’ import volumes and main import products to the EU and the USA, 2001

  8. Summary of SACU‘s Trade Relations with the EU and the USA • The EU is SACU‘ s main trading partner, while the USA can be classified as medium-relevant trading partner • Intra-industrial trade between the SACU and the EU and the USA respectivley is limited to South Africa and to a certain trade share • BLNS trade with the EU and the USA shows a typical South-North trade pattern

  9. Chances and Risks of a SACU-USA FTA Expansion of trade and market access opportunities received under AGOA US-export subsidies result in adverse competition in the SACU market Import of genetically modified organism might constrain SACU’s export options Non-tariff barriers (e.g. technical and safety requirements) might frustrate enhanced market access options Increased attraction of FDI due to larger market and contractual binding to the USA Effectiveness and innovation effects due to increased competition and cheap capital-intensive inputs. Product diversification process will be promoted and industrialisation strengthened. Exclusion of sector’s where South Africa has comparative advantages, e.g. steel industry Rejection of an independent dispute settlement mechanism by the USA

  10. Topics that need to be addressed in a SACU-USA FTA 1. Improved market access for all products. 2. Asymmetry in the liberalisation schedule in both, time-frame and content. 3. Support to address supply-side constraints. 4. Ban on subsidised US agricultural imports and genetically modified food.

  11. Topics that need to be addressed in a SACU-USA FTA 5. Generous rules of origin that allows extensive cumulation. 6. Technical assistance to meet product and standard requirements and to broaden and strengthen the tax base. 7. Insist on pure trade negotiations. 8. Establishment of an independent dispute settlement mechanism.

  12. Questions and comments are very welcome … GDP in purchasing power parity (in billion US$), 2001

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