Local steel, aluminium no threat to US security

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“It is clear that SA does not pose a threat to US national security and the steel and aluminium industries but it is a source of strategic primary and secondary steel used in further value-added manufacturing in the US,” said trade and industry minister Rob Davies.

Speaking at bilateral meetings in Washington DC with US trade representative Ambassador Robert Lighthizer and the secretary of commerce Wilbur Ross, as well as senators Chris Coons and Johnny Isakson, the minister said South Africa’s exports of steel to the United States accounted for less than 1% of total US imports.

He further added that South African exports also account for 0.3% of total US steel demand.

Although this represents a small fraction of US imports, South African exports of steel to the US accounted for 5% of South African production equating to 7,500 jobs in the steel value chain.

In May, US President Donald Trump signed proclamations granting permanent country-exemptions to a select number of countries and extended by one month the Section 232 steel and aluminium tariff duty exemptions for some. South Africa was not exempted in the application of steel and aluminium duties

During the meetings Davies said that South Africa’s exports of aluminium were about 1.6% of total US aluminium imports.

South Africa supplies specialised aluminium sheet, coil and plate for automotive, battery, and aerospace industries in the United States.

Investigation into automobiles and components

Davies also expressed his concern on the on-going Section 232 investigation on automobiles and auto components. This as South Africa accounted for 0.4% of total US imports of automotive products.

Davies also said that if Section 232 duties were to be imposed on auto exports from South Africa, Africa Growth and Opportunity Act (AGOA) benefits for South Africa will be significantly eroded taking into account that Section 232 tariffs effectively suspends AGOA preferences.

“The development integration agenda that the African continent pursues provides huge opportunities for cooperation between the US and the continent. The continent's key objective is to change the structure of our economies and there is a potential for practical cooperation between South Africa and the US in promoting business-business commercial trade and investment relations,” he said.

Davies together with small business development minister Lindiwe Zulu were in Washington DC, in the United States to participate in the 17th AGOA Forum. The forum brought together trade ministers from AGOA-eligible countries, the US government, private sector and civil society to discuss the implementation of AGOA under the theme “Forging New Strategies for US -Africa Trade and Investment Forum”.

FTA negotiations

During the forum, African ministers highlighted that African countries were not in a position to enter into Free Trade Agreement (FTA) negotiations with the US, pending finalisation of the African Continent Free Trade Agreement in line with the AU heads of states and government summit decision in Mauritania.

The ministers encouraged the US to engage with Africa as a bloc through the AU in the development of the architecture for the post-2025 trade and investment relationship rather than with individual countries.

This follows the announcement by Ambassador Lighthizer that the US plans to negotiate an FTA with an African country that would serve as a model to other countries in the continent.

Small business

Meanwhile, Zulu co-chaired a session with deputy associate administrator of small business agency Eugene Cornelius.

Zulu said South Africa remains committed to the implementation of the AGOA partnership aimed at boosting trade and investment ties between Sub-Saharan Africa and the US, and deepening practical cooperation at enterprise to enterprise level.

This cooperation, she said, will provide opportunities for local small, medium and micro-sized enterprises (SMMEs) to participate in regional and global value-chains and build their capacities to compete globally.

Zulu said compared to large enterprises, SMMEs have a lower share of the global market, but are increasingly adapting to the growing technological revolution and benefiting from the growing online market.

Zulu’s participation aims to promote cooperation towards promoting inclusive e-commerce that promotes the structural transformation of African countries and to tap into the Fourth Industrial Revolution.

The recently concluded two-day AGOA Forum is an annual forum taking place on an alternating basis between Sub-Saharan Africa and the United States.