Working Papers

South Africa’s redesignation as a ‘developed country’ in United States trade remedies legislation and investigations: possible impacts and consequences

South Africa’s redesignation as a ‘developed country’ in United States trade remedies legislation and investigations: possible impacts and consequences

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18 May 2020

Author(s): Eckart Naumann

In recent weeks and months, numerous media headlines and associated articles have focused on the United States-South Africa trade relationship, some going as far as proclaiming that South Africa had lost its access to the United States (US) market. In reality, the situation is quite different. This paper unpacks some of these developments and how they are likely (or not) to impact South Africa.

There are essentially two separate – and fundamentally unrelated – recent developments that should not be conflated. The common denominator on these issues is only that they (potentially, theoretically) impact on US-South Africa trade, and specifically South Africa’s exports to the US market.

The more recent of these two issues relates to market access and trade more indirectly and specifically deals with the US countervailing duty investigations (CVD) procedures and practices – which in turn can be classified under the broader umbrella of trade remedies legislation. It does not have a direct bearing on South Africa’s market access or trade, but rather tightens the criteria and country designations that the US uses to launch (or terminate, as the case may be) trade remedy investigations relating to illegal subsidies paid in exporter countries. With a positive outcome, such investigations can, of course, lead to restrictions on South Africa’s exports to the US, mainly in the form of an imposition of duties payable by the US buyers (importers) of South African-made goods.

The other issue presently in the spotlight is South Africa’s status as a US Generalised System of Preferences (GSP) beneficiary, which is the US non-reciprocal trade preference programme. It is here that South Africa’s status is currently under review given its potential non-compliance with the programme’s eligibility criteria.

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