South Africa to buy gas from US in proposed new trade deal

Ramaphosa

Johannesburg – South Africa said on Monday it plans to buy liquefied natural gas from the United States in a proposed deal worth around $1 billion a year, after a tense televised encounter between the countries’ presidents.

In return for agreeing to buy the gas (LNG), South Africa would avoid paying duty on exports of 40,000 vehicles a year to the United States, cabinet minister Khumbudzo Ntshavheni wrote in a newspaper comment piece.The proposals followed tense talks between South Africa’s President Cyril Ramaphosa and his US counterpart Donald Trump at the White House last week, which aimed to reset plummeting relations and save trade ties vital to South Africa’s sputtering economy.Under the terms of a deal yet to be finalised, South Africa would import LNG from the United States for 10 years, Ntshavheni wrote in the country’s Sunday Times newspaper.The United States would also invest in gas infrastructure development in South Africa, including in fracking, said Ntshavheni, who was in the delegation that accompanied Ramaphosa at the talks on Wednesday.

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 South Africa would in turn be able to export 40,000 vehicles a year to the United States without duties as well as 385,000 tonnes of steel and 132,000 tonnes of aluminium, she said.

She said the deal would yield about $900m-1.2bn in trade a year.

South Africa has a vast trade deficit with the United States, which has threatened to impose 30-percent tariffs.

The proposed deal would also allow duty-free imports of automotive components from South Africa for US car production.

“These are numbers contained in the trade deal proposal that South Africa has presented to the USTR (US Trade Representative) for consideration and further negotiations,” Ramaphosa’s spokesman Vincent Magwenya told AFP.

Ramaphosa said in his weekly newsletter Monday that a key outcome of the talks was “agreement on an economic cooperation channel between the US administration and South Africa to engage further on tariffs and a broad range of trade matters”.

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 “There is potential to increase and diversify trade between our two countries in areas such as gas, mining and critical minerals, agriculture and nuclear products,” he said.

It was also agreed that Washington would be represented at a summit of the Group of 20 leading economies in Johannesburg in November, Ramaphosa said.

Trump had threatened to skip the meeting hosted under the South African presidency this year, as ties frayed over a range of domestic and international policy issues.

During the talks in Washington, Trump confronted Ramaphosa on camera with unfounded claims of genocide against white farmers in South Africa.

But Ramaphosa insisted “the overarching aim of our visit was to deepen our strategic economic partnership with the US as our second-largest trading partner.”

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