Behind the US-SA talks deadlock: John Matisonn

Key topics:US-SA trade talks stall amid tariffs, politics, and unmet demandsDisputes over BEE, land reform, and foreign policy block progressSA eyes China trade deal as US negotiations falter.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.By John Matisonn.A South African-United States trade deal that cuts President Donald Trump’s 30% tariff may be slipping out of reach after several months of broken telephone negotiations and recent new demands from the US.Negotiators for both governments each believe the other side has failed to respond to the issues they have put on the table to save trade between the two countries and reset US-SA relations.In interviews with officials in both governments, both sides believe they have been clear but the other side has been unresponsive to their concerns and failed to negotiate on their core issues. On the American side, officials believe it has made it clear that it wants changes to longstanding trade concerns that had been raised and ignored under Democratic presidents, and are spelt out over five pages of a report on Foreign Trade Barriers by South Africa that is a public document.They also believe their foreign policy and political complaints were made clear in President Donald Trump’s February 7 executive order, referring to South Africa’s relations with Iran, Russia and China and hostility to Israel, as well as complaints about farm murders, BEE ownership rules and expropriation of property without compensation. The US regards BEE ownership rules as a prime non-tariff trade barrier that disadvantages US firms. Several of these issues were raised in the oval office meeting with President Cyril Ramaphosa.The US believes that the South African government’s first and second trade offers ignored its political and foreign policy complaints, and offered very little even on the trade issues. Instead, the US saw the South African offer as raising entirely new issues, like buying US liquefied national gas, LNG, selling the US fruit that is counter-seasonal, and investing in the US while ignoring the US concerns.Senior South African officials interviewed seemed equally baffled by the US position because their trade offers have received almost no response until it was told to make a “more generous” offer.Pretoria believed its offer to buy $10billion to $12billion in US LNG over ten years, and to increase South African investment in the US was a serious response, especially because in the private White House lunch after the oval office clash, both President Donald Trump and Secretary of Commerce Howard Lutnick responded enthusiastically to these ideas. .Read more:.Worldview: Ramaphosa's Expropriation Act sparks global outcry and domestic divide over land reform.The Trump administration’s style of negotiating does not make it easier. Without a US ambassador in South Africa or a South African ambassador in Washington, neither side has had sufficiently senior diplomats on the ground able to keep each side informed. US officials stress that only President Trump knows what level of offer he will accept. Adding to South African pessimism is the new demands considered unorthodox or even violating SA legal rules, including a request to fast track visas to 30 Kenyans to South Africa to process white South Africans for refugee status so they can be granted asylum in the US on the grounds that they are under threat here. “I don’t think they want a deal,” said one senior South African close to the talks.South Africa has now made a third offer to the US to resolve the US-South Africa dispute. DA ministers have also explained to US officials that they are fighting in court and elsewhere to end three of the main controversial issues for the US – expropriation of land without compensation, BEE’s mandatory local black ownership of 30% of a company’s shares, and the “Kill the Boer” song. Earlier this month the ANC announced a new policy banning its members from singing “Kill the Boer”. This is clearly a response to the US campaign against it. As far as the trade issues are concerned, resolution is being found on several agricultural issues, but there remain serious differences over sanitary and phytosanitary issues. South Africa remains concerned about avian flu and a disease that affects pork that has in the past had devastating effects on the SA pork industry. An agreement to accept US gooseberries may be imminent. Meanwhile, Agriculture Minister John Steenhuisen revealed this week that a new trade deal with China is close to completion, as part of its diversification of export markets.The agreement, which will initially cover the export of five varieties of stone fruit, is expected to open the enormous Chinese market.

Behind the US-SA talks deadlock: John Matisonn

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