US Committed To Free Trade Deal With SACU

by Leroy Baker, Tax-News.com New York

01 May 2006

The United States remains committed to concluding a comprehensive free trade agreement with the Southern African Customs Union (SACU), according to Deputy United States Trade Representative Karan Bhatia.

Meeting last week with senior officials from the member countries of the SACU, Ambassador Bhatia said that the near-term objective of the Bush administration was the strengthening of the U.S.-SACU trade and investment partnership in "concrete ways."

"Our discussions focused on the best way to move forward on the FTA and how we can build upon and improve our trade partnership more broadly," commented Ambassador Bhatia.

"To that end, the United States and SACU have agreed - subject to approval by Ministers - to establish a framework through which the Parties will remain vigorously engaged in growing and deepening our bilateral relationship," he added.

The SACU membership includes Botswana, Lesotho, Namibia, South Africa, and Swaziland. The oldest customs union in the world, goods traded between member countries are free from tariffs, while the group applies a common external tariff and a common excise tariff. All customs and excise collected in the common customs area are paid into South Africa’s national Revenue Fund. The Revenue is shared among members according to a revenue-sharing formula as described in the agreement.

The United States and SACU launched FTA negotiations in 2003 to secure a more comprehensive and long-term U.S.-SACU trade relationship that would build on the success of the African Growth and Opportunities Act, under which two-way trade between the United States and sub-Saharan Africa has more than doubled. However, the United States and SACU have had differences on some core issues in the FTA.

"The United States and SACU will develop a joint work program to address a broad range of FTA and other trade- and investment-related issues and, potentially in the near-term, seek to conclude concrete trade and investment-enhancing agreements," added Bhatia.

Ambassador Bhatia explained that the framework would establish a basis and building blocks for pursuing the FTA over the longer term. He noted that the proposed framework would require further consultations within the U.S. government and with U.S. stakeholders, including the private sector.

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