Economy: DTI silent on loss of US trade benefits

The Office of the US Trade Representative has unilaterally removed SA from its list of developing countries receiving ‘preferential trade benefits’ under the World Trade Organisation (WTO) agreement on subsidies and countervailing measures. This was confirmed yesterday morning in updated lists published in the US Federal Register, reports Pam Saxby for Legalbrief Policy Watch. While, at the time of writing, the Department of Trade & Industry had yet to comment on the announcement, the DA’s Dean Macpherson lost no time in issuing a media statement questioning the rationale behind basing SA’s exclusion on its membership of the G20. In the view of the Office of the US Trade Representative, ‘G20 membership indicates that a country is developed’ and therefore ‘ineligible for the 2% de minimis standard’.

According to the Federal Register notice concerned, in terms of the WTO agreement ‘members that have not yet reached the status of a developed country are entitled to special treatment’. Imports from these member states ‘are subject to different thresholds for purposes of determining whether countervailable subsidies are de minimis and whether import volumes are negligible’. The notice explicitly states that the decision to exclude SA from the list of developing countries qualifying for subsidies was made ‘notwithstanding that, based on the most recent World Bank data, … (it) has a per capita gross national income below $12 375’. The same rationale was used in removing Argentina, India, Brazil and Indonesia from the list. Consequently, as far as trade with the US is concerned, although SA’s ‘economic performance’ relegates it to developing country status, its G20 membership elevates it to that of a developed nation (Business Insider) – an anomaly Macpherson considers ‘somewhat unfair and short-sighted’.

The DA’s statement also referred to the ‘threat’ posed by the controversial, yet-to-be enacted 2017 Copyright Amendment Bill to SA’s trade status in terms of the US generalised system of preference. The US Trade Representative’s ongoing country practice review of SA’s eligibility was prompted by a complaint last year from ‘big US entertainment companies under the umbrella of the International Intellectual Property Alliance’ (Daily Maverick) – and has implications for the 2016 Performers’ Protection Amendment Bill also awaiting presidential assent. A public hearing held in Washington on 30 January included country practice reviews of Azerbaijan, Ecuador, Georgia, Indonesia, Kazakhstan, Thailand and Uzbekistan, along with a country designation review of Laos. Post-hearings briefings and statements are being accepted until 28 February – which may explain why the Department of Trade & Industry has yet to comment on the issue.