Trade union warns about United States investigating BEE in South Africa

Trade union Solidarity said it plans to engage in discussions with the South African and United States governments in light of an investigation into local labour practices.

Solidarity warned that this investigation could have severe consequences for South Africa, particularly if the United States turns its attention to the country’s racial legislation in the workplace.

This comes after the United States announced that it has initiated investigations into the labour acts, policies and practices in the manufacturing sectors of various countries.

These countries include South Africa, China, the European Union, Singapore, Switzerland, and various others.

United States Trade Representative Jamieson Greer announced that the investigation would fall under Section 301(b) of the Trade Act of 1974, which relates to structural excess capacity and production in manufacturing sectors.

“The United States will no longer sacrifice its industrial base to other countries that may be exporting their problems with excess capacity and production to us,” Greer said in a statement.

“Today’s investigations underscore President Trump’s commitment to reshore critical supply chains and create good-paying jobs for American workers across our manufacturing sectors.”

He explained that many US trading partners are producing more goods than they can consume, and export this excess to the United States, displacing American manufacturers.

“In many sectors, the United States has lost substantial domestic production capacity or has fallen worryingly behind foreign competitors,” he explained.

Therefore, the investigation will fall under Section 301(b) of the Trade Act, which is designed to address unfair foreign practices affecting US commerce.

In a press statement released on Monday, 16 March, Solidarity claimed that the investigation could result in the suspension of all trade with South Africa if evidence of wrongdoing is found.

“Another possible outcome is the imposition of renewed high import tariffs on South African goods, which would also be very detrimental to South Africa,” the union warned.

Solidarity said it is very concerned about the consequences of this investigation for ordinary South African workers employed in various sectors that are currently heavily dependent on exports to the US.

“Solidarity is also concerned that there is a real possibility that American investigators could find South Africa guilty of especially discriminatory practices related to racial legislation in the workplace,” the union said, adding that this could lead to immediate economic sanctions.

Solidarity’s warning

In light of these concerns, Solidarity said it will urgently engage in discussions with the South African and American governments regarding discriminatory labour practices. 

The union said it plans to engage with the Minister of Trade and Industry as soon as possible to identify local solutions. 

“Solidarity will also engage with the US once discussions with the South African government have been concluded,” it said.

The trade union said it is particularly concerned about the United States’ potential investigation into South Africa’s black economic empowerment (BEE) policies.

It noted that the United States government has already voiced its concerns regarding BEE, which it views as a trade restriction placed on US companies that want to do business with and in South Africa.

As recently as last week, the US Ambassador to South Africa, Leo Brent Bozell III, urged South African businesses to be more publicly vocal in their criticism of BEE and its negative consequences.

Bozell listed doing away with BEE as one of five “asks” from the US government of South Africa. He called on the country to end the mandatory surrender of ownership or control of corporate decision-making as a cost of doing business.

“New regulations, recently approved by parliament, which grant the Minister of Labour and Employment sweeping new powers to set racial quotas for industries, are also likely to meet the definition of discriminatory practices,” Solidarity claimed.

“South Africa’s discriminatory labour practices are contrary to international conventions, as confirmed in the settlement negotiated by Solidarity and the government under the supervision of the International Labour Organisation (ILO).” 

“By continuing to do so, the government exposes South Africa to numerous trade risks by alienating important partners such as the US and Europe.”