SA coalition party says US trade deal may hinge on race policies

The second biggest party in South Africa's ruling coalition thinks the 30% tariff US President Donald Trump imposed on its exports to the US will stay unless the government changes some domestic race policies such as affirmative action, its leader said on Monday.

The government has tried for months to negotiate a trade deal with Washington but failed to an reach agreement before Trump's deadline. Its exports to the US face the highest tariff rate in Sub-Saharan Africa.

“It is very clear that while we've been negotiating on a trade track, the issues with the Trump administration are deeper than that,” DA leader John Steenhuisen told Reuters in an interview.

“These cover things (like) expropriation without compensation. It deals with some  labour laws in the country and also the racial legislation,” Steenhuisen said.

He said SA's membership of the Brics bloc centred on Brazil, Russia, India and China,  and which aims to challenge US hegemony, was also an issue for the Trump administration. The pro-business DA party has long opposed the BBBEE Act and other laws which aim to address the racial inequality that has persisted since the end of apartheid. It said they should be replaced with nonracial measures to boost the economy and create jobs, such as removing red tape and simplifying business licensing.

However, Steenhuisen also said he thought it was “odd” that the Trump administration was linking such issues to trade.

“Just as we would not seek to interfere in the domestic politics of the US, we would expect that issues that relate to our own sovereignty are also respected,” he said.

President Cyril Ramaphosa and the ANC are unlikely to make concessions on issues such as BEE.

The ANC regards it as a flagship policy meant to address apartheid's legacy: white South Africans continue on average to by far be the wealthiest racial group, while most of the poor are black.

The ANC also said concerns over the Expropriation Act signed this year, which enables the government to address inequalities in land ownership in rare cases by seizing it for redistribution, are overblown. No land has been taken under the law.

Steenhuisen said the laws could not be changed overnight to please the US because they have to be debated at length in parliament.

However, he said he thought it might improve relations if SA sent a “signal” that it intended to move in that direction.

“My worry is that we're going to continue to negotiate on tariffs and trade (and) the 30% is going to remain,” he said.

Steenhuisen serves as agriculture minister. Agriculture is one of the sectors worst hit by the tariffs.

Reuters