SA sees trade unaffected by US subsidy-preferences loss

South African exports to the US are unlikely to be affected by the Trump administration’s decision to remove the country’s exemption from trade-remedy laws, according to the South African government.

The US last week narrowed its internal list of developing and least-developed countries, including South Africa, China and India, in order to reduce the threshold for triggering a US investigation into whether nations are harming US industries with unfairly subsidised exports.

The implications of the US decision to revise its developing-country methodology “will need further assessment,” South Africa’s Department of Trade and Industry said in a statement on its website. “However, as the South African government does not provide subsidies to industry or agriculture that are illegal under the terms of the World Trade Organization Subsidies and Countervailing Measures, the new US Trade Representative designation should have no direct impact,” it said.

Trade in goods and services between South Africa and the US was valued at $18.9 billion in 2018, with $2.4 billion of exports from South Africa cleared under the so-called Generalized System of Preferences, America’s oldest and largest trade-preference program for the world’s poorest economies, and African Growth and Opportunity Act preferential programs, according to US government data.

South Africa’s preferential market access to the US is under review after the USTR accepted a complaint from the International Intellectual Property Alliance - a private-sector group that represents 3 200 US companies including the makers and distributors of books, films, music and video games - that alleges South Africa’s Copyright Amendment Bill and Performers’ Protection Amendment Bill fail to “provide adequate and effective protection” of U.S. copyrights.

If the outcome of the review is negative, South Africa could lose its preferential market access under the GSP and AGOA, which together allow most sub-Saharan African countries duty-free access to the US market for almost 7 000 products. That could deepen the malaise of an economy stuck in its longest downward cycle since World War II.