Zuma's Proposed Trade Policies: The Last Thing SA Needs

A number of controversial prote ctionist policies – which will affect divers e sectors ranging from agriculture to security – could b e written into law in the coming months. Experts believe that,instead of stimulating the local economy, t hey could have the opposite effect.

- Peter Fabricius 

Tthe Zuma administration is jeop-ardising South Africa’s economic relations with the United States by pursuing increasingly protectionist trade and investment policies that are likely to antagonise an equally protectionist Trump administration.

A raft of pending trade and investment legislation and rising tariff barriers could prompt the US to end SA’s duty-free access to its lucrative market, experts say. Meanwhile, some of these measures and SA’s protracted political crisis and lacklustre economy are tipping the balance against it as an investment destination.

In particular, SA is once again risking its lucrative participation in the US African Growth and Opportunity Act (Agoa) growth scheme because of President Jacob Zuma’s policies, investment lawyer Peter Leon and trade expert Peter Draper, head of Tutwa Consulting, said at a recent seminar in Johannesburg.

Agoa provides lucrative duty-free access for a range of products to the US market. That could be lost to SA immediately if Zuma now signs controversial legislation to force American and other foreign-owned security companies to sell at least 51% of ownership to South Africans.

The Private Security Industry Regulation Amendment (PSIRA) Bill was passed by Parliament in 2014 but the US threatened to suspend SA’s Agoa benefits if Zuma signed it into law because two of the four major internationallyowned private security companies in SA are American. The bill has been lying unsigned on Zuma’s desk ever since, also because it violates World Trade Organization (WTO) free trade rules, Leon said. However, Leon noted that state security minister David Mahlobo had hinted in Parliament on 16 May that it could now be signed.

The bill is also likely to hurt jobs, with economist Roelof Botha estimating in 2015 that it could cost the economy more than 800 000 jobs in a number of sectors, and shave R133.4bn off GDP,