US embassy cable - 05PRETORIA847

UNCLAS SECTION 01 OF 02 PRETORIA 000847 
 
SIPDIS 
 
SENSITIVE BUT UNCLASSIFIED 
 
DEPT FOR AF/S KGAITHER; AF/EPS; EB/TPP/BTA 
USDOC FOR 4510/ITA/IEP/ANESA/OA/JDIEMOND 
TREASURY FOR OWHYCHE-SHAW AND BRESNICK 
DEPT PASS USTR FOR PCOLEMAN, WJACKSON AND DDWOSKIN 
GENEVA FOR USTR 
 
E.O. 12958: N/A 
TAGS: ETRD, EAGR, KTEX, SF, USTR 
SUBJECT: DTI DISCUSSES DOHA WITH COMMERCE DAS VINEYARD 
 
 
(U) This cable is sensitive but unclassified.  Not for 
Internet Distribution. 
 
1. (SBU) Summary.  Commerce DAS Holly Vineyard met with 
Department of Trade and Industry (DTI) officials on February 
18.  There is more interest now by South Africa in taking 
advantage of the category 9 provisions of AGOA that allow 
duty-free import of certain handloomed, handmade and 
folkloric items into the United States.  Negotiations with 
India for a trade agreement may commence in the third 
quarter.   Vineyard noted continuing U.S. concerns on IPR 
protection.  South Africa is optimistic on the prospects for 
success on the Doha Development Agenda.  Xavier Carim was 
"quite pleased" with a recent proposal by then USTR 
Ambassador Zoellick regarding the coefficients in the 
modalities for agriculture negotiations.  The bureaucratic 
process is one reason why South Africa has not yet submitted 
its own services offer, although the Finance Minister has 
signed off on financial services sector offer.  South Africa 
has still not taken an official position on the various 
candidates for the WTO Director General position, but sees 
resolution of this process as necessary for progress in Honk 
Kong at the end of the year. End summary. 
 
2. (SBU) Commerce DAS Holly Vineyard met with Department of 
Trade and Industry (DTI) officials Sudhir Sooklal and Thabo 
Chauke on February 18 to discuss AGOA, IPR, and the Doha 
Development Agenda.  Sooklal noted that Chief Director 
Xavier Carim and Head of the Americas Desk Victor Mashebela 
were not able to attend.  They had to go to a SACU meeting 
in Namibia where there would be a discussion about AUSTR 
Florie Liser's invitation to a March 18 Deputies meeting in 
Geneva on the FTA. 
 
3. (SBU) Sooklal also mentioned that Chief Director Iqbal 
Sharma had just returned from India in which SACU and India 
had agreed on a framework for negotiations of a trade 
agreement that would probably start out as a Preferential 
Trade Agreement but could eventually become a Free Trade 
Agreement.  Negotiations with India may begin in the third 
quarter of this year.  Phase one of the negotiations would 
deal with goods and TBTs, while services would be left for 
phase two. 
 
AGOA 
---- 
 
4.  (SBU) DAS Vineyard opened the meeting indicating that 
Senegal would host the next AGOA Forum, probably in July, 
and solicited South Africa's active participation and input. 
Sooklal agreed on the importance of the AGOA forum and said 
he would put it on Minister Mpahlwa's radar screen. 
 
5. (SBU) Sooklal noted that there had recently been renewed 
interest in the category 9 provisions of AGOA that allow for 
duty-free importation into the United States of certain 
handloomed, handmade and folkloric articles.  He explained 
that SMEs had not been organized when AGOA was first 
implemented, with only a few firms showing interest, but 
this has changed.  DTI would be working with the Chamber of 
Business to see how South Africa firms might take advantage 
of category 9, particularly given the more liberal 
provisions provided by subsequent legislation amending AGOA. 
Chauke was hopeful that the process would begin in March. 
Vineyard offered assistance in liaising with the Commerce 
Department experts on AGOA category 9 items. 
 
IPR 
--- 
 
6.  (SBU) DAS Vineyard underlined the U.S. interest in 
improving IPR protection in South Africa, noting the STOP 
(Strategy Targeting Organized Piracy) program to stop trade 
in pirated and counterfeit goods and the current Special 301 
process. 
 
Doha Development Agenda 
----------------------- 
 
7.  (SBU) A discussion of the Doha Development Agenda was 
the main focus of the meeting.  DAS Vineyard reiterated U.S. 
views and its commitment to a successful outcome.  Sooklal, 
who had clearly been briefed by Xavier Carim, made several 
points on the Doha Development Agenda.  He said that South 
Africa is extremely committed to a successful conclusion of 
the Doha Development Agenda, which is also important for 
NEPAD and the AU.  South Africa feels confident that there 
is an opportunity to deliver tangible results 
 
Services 
-------- 
 
8.  (SBU) There is concern about the slow pace of services. 
South Africa has itself been embarrassingly slow on services 
and has not yet tabled its services offer, which he 
attributed to bureaucratic delays, including the Permanent 
Trade Forum, a consultation mechanism established in 2003, 
and other departments, such as Justice, that do not have a 
full appreciation of the WTO agreements.  DTI bears some of 
the blame for not doing an adequate marketing job, in part 
due to capacity constraints.  DTI's Director General will 
host the inaugural meeting of the Permanent Trade Forum next 
month with all the DGs from other departments participating. 
The only exception so far to the slow progress on the SAG's 
services offer is that Minister of Finance Trevor Manuel has 
signed off on South Africa's financial services offer. The 
cabinet has prioritized services since January 2004.  The 
government has commissioned the HSRC (Human Sciences 
Research Council) to do research on services, which was 
supposed to be completed in January 2005.  The second phase 
of the work will involve research on specific sectors. 
 
Agriculture 
----------- 
 
9. (SBU) South Africa was pleased with the agreement to 
phase out export subsidies but was concerned about the EU's 
new scheme for wheat exports, which is not conducive to the 
negotiation.  Sooklal said Carim was "quite pleased" and 
"quite positive" about a proposal Ambassador Zoellick had 
made recently in Davos regarding modalities on agriculture 
that involves two different coefficients for the formula. 
South Africa saw this as a step forward. 
 
Trade Facilitation 
------------------ 
 
10.  (SBU) While everyone is happy about having trade 
facilitation in the negotiations, the "how" is the difficult 
part, especially as it may place burdens on LDCs.  It is a 
good thing, but implementation and financing will be issues. 
 
NAMA (Non-Agricultural Market Access) 
------------------------------------- 
 
11.  (SBU) The next stage is now deciding on which formula 
to use.  Sooklal said there is a current understanding about 
using the same Swiss formula as in the Uruguay Round, but 
there are questions about the coefficients to be used by 
developed countries, developing countries, and LDCs. 
 
WTO Director General 
-------------------- 
 
12.  (SBU) A timely election of the next WTO DG is essential 
for success in Hong Kong.  South Africa wants to avoid a 
replay of the Moore-Supachai DG succession imbroglio four 
years ago.  South Africa has not yet taken an official 
position on the DG candidates. Given the African group's 
support for Minister Cuttarree of Mauritius, South Africa 
could fall in line with that.  South Africa's Department of 
Foreign Affairs is also interested in this issue. So far, 
however, the DTI Minister has not given any direction on 
which candidate South Africa would support.  For example, 
because of the IBSA (India, Brazil, South Africa) Forum, 
there could be support for the Brazilian candidate, 
Ambassador Seixas Correa.  In the meantime, Pascal Lamy will 
be in South Africa the week of February 22 to advance his 
candidacy. 
 
13.  (SBU) Overall, South Africa is optimistic that there 
can be a successful outcome on Doha, but a lot of substance 
remains to be done between now and July, and by December in 
Honk Kong. 
 
14. (U) Commerce DAS Holly Vineyard cleared this cable. 
 
FRAZER