VZCZCXRO2132
RR RUEHDU RUEHJO
DE RUEHSA #0964/01 0671413
ZNR UUUUU ZZH
R 081413Z MAR 06
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 2074
INFO RUEHBU/AMEMBASSY BUENOS AIRES 0215
RUEHTN/AMCONSUL CAPE TOWN 2497
RUEHDU/AMCONSUL DURBAN 7544
RUEHJO/AMCONSUL JOHANNESBURG 4054
RUCPDC/DEPT OF COMMERCE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUEAWJC/DEPT OF JUSTICE WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 PRETORIA 000964 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR AF/S MGABLE; AF/EPS MNORMAN 
USDOC FOR 4510/ITA/IEP/ANESA/OA/JDIEMOND 
TREASURY FOR BCUSHMAN 
DEPT PASS TO USTR FOR PCOLEMAN AND WJACKSON 
 
E.O. 12958: N/A 
TAGS: ETRD ECON PHUM USTR AGOA PREL SF
SUBJECT: SOUTH AFRICA: INPUT FOR PRESIDENT'S 2006 REPORT ON 
AGOA 
 
REF: A. 06 STATE 26707 
 
     ¶B. 05 PRETORIA 4109 
 
¶1. (U) This cable responds to the request for post input to 
the President's 2006 Report on AGOA, drawing on instructions 
provided in Ref A. 
 
Market Economy, Economic Reform, and the 
Elimination of Barriers to U.S. Trade 
---------------------------------------- 
 
¶2. (U) The South African government continues to implement 
prudent fiscal and monetary policies.  Inflation averaged 
3.9% in 2005, well within the Central Bank's 3-6% target 
range.  Economic growth, at 4.9%, exceeded government 
expectations for 2005.  The 2006 budget once again focused on 
maintaining the fiscal balance as well as accelerating 
economic growth so as to alleviate high unemployment.  The 
President and Deputy President have announced the Accelerated 
and Shared Growth Initiative in an effort to remove obstacles 
to higher growth.  Central to this initiative is greater 
government spending, especially on infrastructure, and 
helping local and provincial government to better implement 
government programs and deliver public services to the poor. 
 
¶3. (U) Negotiations on a free trade agreement with the 
Southern African Customs Union (SACU) have stalled over the 
reluctance of SACU to negotiate chapters on labor, 
environment, intellectual property, government procurement, 
and services.  A bilateral tax treaty and a Trade and 
Investment Framework Agreement remain in force.  South Africa 
provides national treatment to foreign investors.  The 
country has made considerable progress on enforcing 
intellectual property rights.  The Department of Trade and 
Industry is creating a 36-person strong enforcement unit and 
the judiciary increasingly understands the complexity and 
specialized nature of intellectual property rights. 
Specialized Commercial Crime Courts have been established in 
the major cities of Johannesburg, Pretoria, Durban, Cape 
Town, and Port Elizabeth.  In January 2005, the harshest ever 
sentence for pirating was meted out, i.e., eight years in 
jail or a fine of R440,000 ($67,000).  A gap in the 
counterfeit goods law makes it difficult to seize pirated 
goods that transit South Africa. 
 
Rule of Law, Political Pluralism. and Anti-Corruption 
--------------------------------------------- -------- 
 
¶4. (U) The government is committed to the rule of law and is 
working to strengthen its judicial and regulatory systems. 
The judiciary is independent at all levels.  South Africa 
maintains a multiparty parliamentary democracy within which 
political parties are allowed to operate freely.  Free and 
fair municipal elections were held March 1, 2006.  While the 
African National Congress holds an overwhelming majority in 
Parliament and in other levels of elected government, several 
opposition parties are quite active.  Municipal service 
delivery and corruption remain a challenge.  The government 
has prosecuted dozens of members of Parliament, municipal 
councilors, and the former Deputy President for corruption. 
 
Poverty Reduction 
----------------- 
 
¶5. (U) Poverty reduction and job creation are major 
government priorities.  The February 2006 budget contained 
additional measures to improve the social welfare payment 
system and the delivery of public services, such as water and 
sanitation, electricity, and telephony, especially to the 
rural poor.  It also allocated funds for civil projects that 
employ labor-intensive methods as a means to create 
employment and impart job skills. 
 
Labor, Child Labor, and Human Rights 
------------------------------------ 
 
¶6. (U) The South African constitution provides for equal 
protection under the law, freedom of speech and of press, 
 
PRETORIA 00000964  002 OF 002 
 
 
freedom of assembly, and an independent judiciary.  The 
constitution also protects strong worker rights, including 
freedom of association and the right to organize and bargain 
collectively. 
 
¶7. (U) Approximately 26 percent of economically active South 
Africans belong to 485 registered trade unions.  South Africa 
ratified ILO conventions 29 and 105, and prohibits forced or 
compulsory labor.  In sectors where unions have found it 
difficult to organize, such as farming and domestic work, the 
Department of Labor has established sector-wide minimum 
wages. 
 
¶8. (U) South Africa is actively engaged in reducing the 
incidence of child labor, including the worst forms of child 
labor.  The government is taking preventative measures, 
including eligibility for income grants for poor children 
under the age of 11 and waivers of school fees for poor 
children, and actively prosecuting employers of child labor. 
The SAG prohibits child labor for children under the age of 
15 or under the minimum school leaving age (where the age is 
15 or older), and does not allow the employment of children 
over age 15, should that employment be detrimental to the 
child.  Children under age 15 are allowed limited employment 
in film, entertainment, sports and advertising, if the 
employer has applied for and been granted license by the 
South African Department of Labor.  South Africa has ratified 
ILO convention 182 on the worst forms of child labor.  The 
latest survey of child labor was conducted in 1999, and found 
that 36 percent of children between the ages of 5 and 17 
engaged in work of some type, most frequently fetching fuel 
or water.  The high incidence of HIV/AIDS in the country has 
complicated the picture somewhat because it has led to a 
marked increase in the number of child-headed households. 
 
¶9. (U) The government has focused high-level attention on the 
human rights issues involving law enforcement, however deaths 
caused by excessive force from police and/or security forces 
and deaths while in police custody have been reported.  Some 
police officers have reportedly beat, raped, and otherwise 
abused suspects and detainees.  The government has taken 
action to investigate and punish some of those involved. 
TEITELBAUM