South Africa to lose preferential access to US markets

The US has narrowed its list of countries it considers to be developing nations, including SA, to prevent them getting special trade preferences.

SA is set to lose preferential access to US markets after the Trump administration moved to change key exemptions to America’s trade-remedy laws on Monday.  

In 2019, US President Donald Trump issued an executive memo that asked US trade representative Robert Lighthizer to determine whether there has been “substantial progress” towards limiting the number of countries considered developing nations. 

“The WTO [World Trade Organisation] is BROKEN when the world’s RICHEST countries claim to be developing countries to avoid WTO rules and get special treatment. NO more!!! Today I directed the U.S. Trade Representative to take action so that countries stop CHEATING the system at the expense of the USA!” Trump said in a tweet in July.

In doing so, the US eliminated its special preferences for a list of self-declared developing countries that includes Albania; Argentina; Armenia; Brazil; Bulgaria; China; Colombia; Costa Rica; Georgia; Hong Kong; India; Indonesia; Kazakhstan; the Kyrgyz Republic; Malaysia; Moldova; Montenegro; North Macedonia; Romania; Singapore; South Africa; South Korea; Thailand; Ukraine; and Vietnam.

The US trade representative said the decision to revise its developing country methodology for countervailing duty investigations is necessary because America’s previous guidance — which dates back to 1998 — “is now obsolete.”

In a separate, but related matter the US is already considering whether SA can continue to be part of its preferential trade programme.

The Trump administration wants to reconsider SA’s preferential access to its markets over concerns that the Copyright Amendment Bill will threaten intellectual property (IP) rights. Should the US decide to suspend SA from the trade programme, the country could lose as much as R34bn in export revenue. The bill, which is being opposed by several local and international lobby groups, has been on President Cyril Ramaphosa’s desk for 10 months.

The International Association for the Protection of Intellectual Property (AIPPI), which represents US companies that produce copyright-protected material including computer software, films, television programmes, music, books, and journals (electronic and print media), is objecting to the bill because of the risk it poses to US IP rights. As a retaliatory measure, the association has been lobbying the US government to withdraw SA’s preferential trade status.

Under the US Trade Act, one of the criteria for eligibility for the generalised system of preferences (GSP) programme is that the state “provide ‘adequate and effective protection’ of American copyrighted works and sound recordings”.

Source: Article by Bekezela Phakathi, Business Day, 11 February 2020

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2014 – EU’s Revised Trade Rules to Assist Developing Countries

European-Commission-Logo-squareThe European Union’s rules determining which countries pay less or no duty when exporting to the 28 country trade bloc, and for which products, will change on 1 January 2014. The changes to the EU’s so-called “Generalised System of Preferences” (GSP) have been agreed with the European Parliament and the Council in October 2012 and are designed to focus help on developing countries most in need. The GSP scheme is seen as a powerful tool for economic development by providing the world’s poorest countries with preferential access to the EU’s market of 500 million consumers.

The new scheme will be focused on fewer beneficiaries (90 countries) to ensure more impact on countries most in need. At the same time, more support will be provided to countries which are serious about implementing international human rights, labour rights and environment and good governance conventions (“GSP+”).

The EU announced the new rules more than a year ago to allow companies enough time to understand the impact of the changes on their business and adapt. To make the transition even smoother for exporting companies, the Commission has prepared a practical GSP guide.

The guide explains in three steps what trade regime will apply after 1 January 2014 to a particular product shipped to the EU from any given country. It also provides information on the trade regime that will apply to goods arriving to the EU shortly after the New Year.

The changes in a nutshell:

  • 90 countries, out of the current 177 beneficiaries, will continue to benefit from the EU’s preferential tariff scheme.
  • 67 countries will benefit from other arrangements with a privileged access to the EU market, but will not be covered by the GSP anymore.
  • 20 countries will stop benefiting from preferential access to the EU. These countries are now high and upper-middle income countries and their exports will now enter the EU with a normal tariff applicable to all other developed countries.

For the finer details of the revised EU rules visit: http://europa.eu/rapid/press-release_MEMO-13-1187_en.htm?locale=en