SA didn't sign CFTA for technical reasons: trade minister Davies


File: Minister of Trade and Industry Rob Davies.

JOHANNESBURG - South Africa fully supports the African Continental Free Trade Area and did not sign it last week only due to technical reasons.

READ: SA will consult before signing African free-trade deal: Ramaphosa

According to Trade and Industry Minister Rob Davies, South Africa has no problems with the content of the free trade area agreement, although the detail still has to be fleshed out.

The minister also briefed media on Monday about the possible impact of the recently announced tariffs on steel and aluminium products.

Less than two percent of South African steel and aluminium products are destined for the United States but a number of South African companies will be significantly impacted by new American import tariffs, which the Department of Trade and Industry says will lead to local job losses.

In the case of steel companies, the tariffs will affect niche jobs with the biggest risk is to workers being in the aluminium sector.

The South African government has liaised with US representatives to address the issue.

READ: Nigeria keen to ensure Africa trade bloc good for itself: President

Davies said,"Some of the criteria they would be looking at for example is whether we’ll consider a quota. How we are dealing with the steel cut in our own economy, which we are. What we are doing in the G20 steel group. They want to make sure we don’t become a transhipment for imports coming from elsewhere."

US President Donald Trump will decide by the end of April on whether South Africa will be exempted from the tariffs.

Meanwhile, the government says it’s committed to signing the Continental Free Trade Agreement (CFTA) that was signed last week by 44 African countries in Rwanda.

Trade unions have raised their concerns about the agreement, saying that African states with weak import controls could be used by countries outside of the continent to dump cheap imports and destroy local industries.

The government says it has reservations over some legal and administrative issues in the agreement.

Davies explained, "the chapter on the rules of origin is an empty circuit board that needs to be populated. That’s also the concern articulated by Nigeria. The CFTA cannot become another way in which our continent is going to be flooded by extra-regional products coming in, using some vague partnership with someone in another country, with low levels of value addition.’

The continental trade deal will be the largest free-trade agreement since the creation of the World Trade Organisation. 

Paid Content