The Department of Trade and Industry (DTI) is currently assessing the impact of recent US trade changes and how they will affect South Africa.
This comes after the Trump administration changed a key exemption to America’s trade laws which will make it easier to penalise 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.
While the manufacturing sector warned that the changes could result in billions of rand in lost revenue, the DTI said that its initial impression is that the change should have no direct impact on the country.
“The implications of this change in the US application for South Africa will need further assessment,” it said.
“However, as the South African government does not provide subsidies to industry or agriculture that are illegal under the terms of the World Trade Organisation agreement on Subsidies and Countervailing Measures, the new US designation should have no direct impact.”
Controversial planned laws
The DTI said that these trade changes are separate from the current review of South Africa under the US Generalised System of Preferences (GSP).
“This GSP review had been initiated by a petition by some US firms that raise concerns about South Africa’s Copyright Amendment Bill,” it said
“The South African Government has been engaged constructively in this process and the review is still unfolding.”
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 programme.
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 recognised labour rights, providing adequate and effective protection of intellectual property rights, and assuring equitable and reasonable access to its markets.