TRALAC - Trade Law Centre

South Africa's Minister Davies: Steel and aluminium exports to US no threat to national security

Sunday, 15 July 2018

Source: Independent Online (South Africa)

South Africa’s steel and aluminium exports to the United States does not pose any threat to US national security, says Trade and Industry Minister Rob Davies.

Davies was speaking during bilateral meetings in Washington DC with US Trade Representative Ambassador Robert Lighthizer, US Secretary of Commerce Wilbur Ross, and senators Chris Coons and Johnny Isakson, the trade and industry department (dti) said in a statement on Sunday.

Davies said South Africa’s exports of steel to the US accounted for less than one percent of total US imports and 0.3% of total US steel demand. 

Although this represented a small fraction of US imports, South African exports of steel to the US accounted for five percent of South African production, equating to 7500 jobs in the steel value chain.

South Africa’s exports of aluminium were about 1.6% of total US aluminium imports. South Africa supplied specialised aluminium sheet, coil, and plate for the automotive, battery, and aerospace industries in the US. In light this, “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”, Davies said.

Earlier, the US decided to impose section 232 duties (see related paper and Infographic) on imports of steel and aluminium, including South Africa, on the basis of national security objectives.

Davies also expressed concern about the ongoing section 232 investigation on automobiles and auto components. In this regard, he indicated that South Africa accounted for 0.4% of total US imports of automotive products. 

In addition, one of the South African auto manufacturers would no longer export automobiles to the US, which would significantly reduce South African exports to the US, he said.

Davies said that if section 232 duties were to be imposed on auto imports from South Africa, the African Growth and Opportunity Act (AGOA) benefits for South Africa would be significantly eroded, taking into account that section 232 tariffs effectively suspended AGOA preferences.

“The development integration agenda that the African continent pursues provides huge opportunities for co-operation between the US and the continent. 

The African continent's key objective is to change the structure of our economies and there is a potential for practical co-operation between South Africa and the US in promoting business-business commercial trade and investment relations,” Davies said.

Davies and Small Business Development Minister Lindiwe Zulu were in Washington DC to participate in the 17th AGOA Forum. 

The forum brought together trade ministers from AGOA-eligible countries, the US government, the private sector, and civil society to discuss the implementation of AGOA under the theme “Forging New Strategies for US-Africa Trade and Investment Forum”, the dti said.

In 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 FTA in line with the recent African Union (AU) heads of state 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 followed the announcement by Lighthizer that the US planned to negotiate an FTA with an African country that would serve as a model to other countries in the continent, the dti said.

 

 

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