Tag Archive for: Trade Agreements

Andrew Stegmann

Namibia Has Ratified the Tripartite Free Trade Area (TFTA) Agreement

The Republic of Namibia has become the eighth country to ratify the Tripartite Free Trade Area (TFTA) Agreement moving the region closer to having a fully operational Agreement this year. Six more countries are required for the Agreement to enter into force.

Tripartite Coordinator at COMESA Secretariat, Dr Seth Gor has confirmed in Lusaka that seven more countries from the EAC-COMESA-SADC are at advanced stages of ratifying the important document which will spur intra-regional trade. “We are optimistic that the remaining six countries will ratify the Agreement and we can have it fully operational this year,” Dr Gor said.

Dr Gor also revealed that the Republic of Burundi deposited its instrument of ratification in November 2019. The TFTA is a building block for the African Continental Free Trade Area (AfCFTA) and its aim is to gradually reduce the tariffs for all goods traded in the bloc to zero percent.

The TFTA is focusing on three pillars, Market Integration, Industrial Development and Infrastructure Development. These three areas have been prioritised to support the regional economic integration efforts in the region and the continent.

Other Member States that have so far ratified the TFTA Agreement are Egypt, Uganda, Kenya, South Africa, Rwanda, Botswana and Burundi.

The TFTA was launched in Sharm-el-Sheikh, Egypt on 10 June 2015 and signed by 22 of the original 26 countries covered by the deal. Tunisia, Somalia and South Sudan have since joined the configuration, bringing the total membership to 29 countries. These countries together represent 53 percent of the African Union membership, 60 percent of continental GDP and a combined population of 800 million.

According to trade experts, if the TFTA countries were one country, it would be the thirteenth largest economy in the world. Merchandise trade within the Tripartite region grew from US$23 billion in 2004 to US$55 billion in 2012 – an increase of 140 per cent during this period, reinforcing the ‘Africa rising’ narrative.

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: Joe McDaniel [1], [2].

Andrew Stegmann
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Trade Benefits Between the US and South Africa May Be Changing

The Trump administration is changing a key exemption to America’s trade laws to make it easier to penalize about two dozen developing countries including China, India and South Africa. The announcement means that South Africa has effectively been removed from a list of nations that can receive preferential trade benefits and is now likely to attract higher import duties and levies to the US market.

It may also see the manufacturing sector losing billions of rand in revenue. Speaking to IOL, the National Association of Automobile Manufacturers of South Africa (Naamsa) said the move was a tragedy for the industry and economy as all preferential treatment was crucial.

“The US has been one of South Africa’s top export destinations and trading partners for the past three decades,” said Naamsa executive manager Norman Lamprecht. “In 2019, a total of 12,437 vehicles were exported to the US along with automotive components to the value of R4.8 billion.”

More changes incoming?

South Africa is also facing another US-related change due to the draft Copyright Amendment and Performers’ Protection Bills. The proposed legislation is a point of significant controversy because it could damage South Africa’s trade relations with the US as it is seen to violate terms of the Generalised System of Preferences (GSP) under the US Trade Act.

The Office of the United States Trade Representative is now holding public hearings in Washington D.C. on South Africa’s eligibility for the GSP program. The country’s eligibility for the GSP program has been called into question as a result of the passing of the Copyright Amendment Bill in parliament last year.

If South Africa loses its GSP eligibility, the country will potentially lose up to R34 billion in export revenue, the Copyright Coalition of South Africa (CCSA) has warned. The office of the United States Trade Representative said in October 2019 that it would review South Africa’s eligibility to participate in its GSP based on a petition it had received. The GSP is the largest and oldest US trade preference program.

It is designed to promote economic development by allowing duty-free entry into the United States for 3,500 products from the 119 designated beneficiary countries and territories. To remain eligible for these advantages, beneficiary countries must comply with 15 statutory eligibility criteria that are important to US interests, including taking steps to afford internationally recognized labor rights, providing adequate and effective protection of intellectual property rights, and assuring equitable and reasonable access to its markets.

“Coupled with the threat of losing our Generalized System of Preference (GSP) over the Copyright Amendment Bill and the distinct possibility that the US Congress will not renew the African Growth and Opportunity Act (AGOA), South Africa is heading towards a perfect trade storm with the United States which will cost us billions of rands and thousands of jobs,” said the DA’s Dean Macpherson.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].