Trump’s move will hit SA exporters

In a heavy blow to some of SA’s top exporters, the Trump administration has removed the country from the list of nations that can receive preferential trade benefits.

The move could see SA losing billions of rand in export revenue and lead to job losses.

The US is a major trading partner, with total exports by SA to that country in 2018 amounting to $8.5bn (about R126bn), which was roughly 9% of the value of all products shipped by SA around the globe.

The top export categories in 2018 were: precious metal and stones ($3.8bn), iron and steel ($752m), vehicles ($553m) and aluminium ($480m).

The US this week narrowed its list of developing and leastdeveloped countries in order to reduce the threshold for triggering a US investigation into

whether nations are harming its industries with unfairly subsidised exports.

Special provisions in World Trade Organization (WTO) agreements give developing countries more time to implement tariff reductions, increased access to foreign markets, protection for their trading interests and technical support to help them implement WTO rules.

The aim is to help poorer countries to reduce poverty, generate employment and integrate themselves into the global trading system.

Prior to Monday’s announcement, in 2019 President Donald Trump issued an executive memo that asked US trade representative Robert Lighthizer to determine whether there had been “substantial progress” towards limiting the number of countries considered developing nations.

The WTO does not have an official policy or definition guiding what constitutes a “developing” country.

The US trade representative also took into account SA’s Group of 20 membership, saying that SA, Argentina, Brazil, India and Indonesia are ineligible and that based on the most recent World Bank data, each country had a per capita gross national income below $12,375.

Other countries that were kicked off the list are Albania, Armenia, Bulgaria, China (including Hong Kong), Colombia, Costa Rica, Georgia, Kazakhstan, the Kyrgyz Republic, Malaysia, Moldova, Montenegro, North Macedonia, Romania, Singapore, South Korea, Thailand, Ukraine and Vietnam.

The department of trade & industry did not respond to a request for comment.

DA MP and trade & industry spokesperson Dean Macpherson said his party would seek a meeting with the US trade representative to raise its objections.

Macpherson said that this was akin to classifying someone as “fit” based on them belonging to a gym.

In a separate but related matter, the US is reviewing SA’s preferential access to its market under its generalised system of preferences (GSP), which allows emerging markets to export goods to the US without paying penalties, over concerns that SA’s copyright bill will weaken protection for US intellectual property rights.

“On the face of it, this seems somewhat unfair and shortsighted. Coupled with the threat of losing our GSP over the Copyright Amendment Bill and the distinct possibility that the US Congress will not renew the African Growth and Opportunity Act (Agoa), SA is heading towards a perfect trade storm with the US. which will cost us billions of rand and thousands of jobs,” Macpherson said.

Agoa is a US trade agreement designed to help African exporters.

R126bn the value of SA exports to the US in 2018, roughly 9% of the value all products shipped around the globe

AIM OF THESE PREFERENCES IS TO HELP POORER COUNTRIES TO REDUCE POVERTY AND GENERATE EMPLOYMENT