US must be more flexible on trade pact-S.Africa

CAPE TOWN, Mar 29 (Reuters) South Africa on Wednesday urged the United States to be more flexible in negotiations towards a free trade pact with southern Africa, warning that current talks may fail to secure a deal.

''If we are to make progress, it is essential that our partners (the U.S.) show much greater flexibility than they have up to now,'' Rob Davies, South Africa's deputy trade minister, said in a speech to parliament.

Washington began formal talks with South Africa and four of its neighbours on a trade agreement in 2003 but little progress has been made in almost three years.

Davies' comments follow remarks by U.S. Trade Representative Rob Portman last month that Washington would pursue the deal as long as the Southern African Customs Union (SACU) was willing to meet its high standards for such pacts.

SACU links South Africa and its neighbours Botswana, Namibia, Swaziland and Lesotho -- countries that already have duty-free access to the U.S. market for most of their exports under the African Growth and Opportunity Act (AGOA).

Davies said negotiations had failed to make progress partly due to inflexible U.S. proposals on tariff reductions that did not take sufficient account of different levels of development.

''These have been combined with demands that would effectively require us to accede to U.S. systems and positions on a host of so-called new generation issues including competition policy, state procurement, intellectual property and so on,'' he said.

Davies said a meeting between the two sides at the level of ''deputies'' had been scheduled for April.

Reuters KD RS2203