US Trade Strategy in Southern Africa: Beyond AGOA and the US-SACU FTA Peter Draper Development through Trade Project The South African Institute of International Affairs “South Africa’s window on the world”

The South African Institute of International Affairs Overview US Africa trade strategy: Current Contours Drivers of change Implications for Southern African integration? The South African Institute of International Affairs “South Africa’s window on the world”

A. US Africa trade strategy: Current Contours Geopolitical framework “War against terror” UN Security Council “Anchor states” and/or sub-regional leaders “hub and spoke” approach Host of development cooperation instruments USAID (reincorporated into State Department) Dedicated funds (eg: Millenium Challenge Account) The South African Institute of International Affairs “South Africa’s window on the world”

The South African Institute of International Affairs Current Contours Trade instruments Generalised System of Preferences (GSP) African Growth and Opportunities Act Extended GSP (1800 products) Textiles provisions especially important Otherwise energy sector primary beneficiary Democracy and good governance provisions Free trade agreements No uptake owing to “gold standard approach” Trade, investment and cooperation agreements Building-block approach to FTAs? The South African Institute of International Affairs “South Africa’s window on the world”

The South African Institute of International Affairs Current Contours Doha round (primary implications) Duty free, quota free market access 33 African LDCs US holding out (97% offer) Agriculture subsidies Cotton (“Cotton four”) Blue box (5 major field crops) Food aid (primarily Africa) Non-agricultural market access South Africa and G20 primary targets Trade with the broader region is complementary The South African Institute of International Affairs “South Africa’s window on the world”

The South African Institute of International Affairs B. Drivers of change Doha impasse Status quo ante Not satisfactory for Africa Renewed emphasis on FTAs But without new US approach unlikely to have much impact on Southern Africa Hence interest in TICAs – but what is their content? The South African Institute of International Affairs “South Africa’s window on the world”

The South African Institute of International Affairs Drivers of change GSP and AGOA? Congressional review Will GSP be extended on time? What about “graduation”? Will AGOA’s LDCs textiles provisions be extended? Are China, India, and Pakistan challenging these provisions, and if so with what consequences? The South African Institute of International Affairs “South Africa’s window on the world”

C. Implications for Southern African integration? Sustaining access to US markets may prove increasingly challenging Reciprocity increasingly in focus Can Southern Africa remain on the agenda? Geopolitical nature of US FTAs Expiration of trade promotion authority Current US comprehensive approach will require: domestic/regional harmonization Deep “behind the border” commitments Serious negotiating capacity The South African Institute of International Affairs “South Africa’s window on the world”

Implications for Southern African integration? This implies pre-existing coherent, deep integration projects in the region Otherwise harmonization to US standards But this is not necessarily a bad thing…? And would reinforce what Economic Partnership Agreements have set in motion But will prove very challenging to deliver The South African Institute of International Affairs “South Africa’s window on the world”