**Frequently Asked Economic Questions and Answers**

**[U.S.-South Africa Economic Comparison]{.underline}**

Q: How do South Africa and the United States compare in terms of size
and economic terms?

A:

  --------------- -- -------------- -- -------------- -- -----------------
  **Statistic**      **South           **United          **Comparison**
                     Africa**          States**          

  Size (sq. km.)     1.2 million       9.6 million       8 Times Larger

  Population         46.9 million      298.3 million     6 Times Larger

  GDP (2005)         \$ 239.5          \$ 12.5           58 Times Larger
                     billion           trillion          

  GDP Per Capita     \$ 5,107          \$ 41,904         8 Times Larger

  *Sources: Stats                                        
  SA, SA Reserve                                         
  Bank, U.S.                                             
  Dept. of                                               
  Commerce, U.S.                                         
  Census Bureau,                                         
  The World Bank                                         
  Group*                                                 
  --------------- -- -------------- -- -------------- -- -----------------

**[U.S. Investment and Assistance in South Africa]{.underline}**

Q: Which country has the largest foreign investment in South Africa?

A: The United States and Europe dominate foreign investment in South
Africa. The United States is the second largest foreign direct investor
in South Africa after the United Kingdom. Since the transition to
democracy in 1994, the United States has been the largest source of
foreign direct investment (FDI) in South Africa. As of December 2004,
the value of U.S. FDI in South Africa is \$5.0 billion, accounting for
nearly 9% of total FDI. The United States is the largest portfolio
investor in South Africa, comprising 41% of the total.

Q: How many U.S. companies have operations in South Africa?

A: Approximately 700 U.S. companies have a presence in South Africa.
Around 200 firms have a direct presence through a subsidiary or sales
office, and 500 firms are represented by a South African agent,
distributor, or representative. Many U.S. companies in South Africa are
members of the American Chamber of Commerce (http://www.amcham.co.za).

Q: Can you name some of the U.S. companies with operations in South
Africa?

A: U.S. firms are represented in nearly every industry sector. Some
examples are as follows: Caltex, Coca-Cola, Minute Maid, McDonalds, Sara
Lee, Ford, General Motors, IBM, Microsoft, Dell, Hewlett Packard, Nike,
Levi Strauss, General Electric, CitiGroup, Johnson & Johnson, Intel,
Oracle, and Caterpillar.

Q: How much development assistance does the United States give to South
Africa?

A: The United States is the second largest bilateral donor to South
Africa in terms of Official Development Assistance (ODA), providing an
annual average of \$100 million in 2003-04. This assistance covered the
areas of health, education, and economic infrastructure. In 2003-04, the
remaining significant donors to South Africa included: European
Community at \$139 million; (2) U.K. at \$112 million; (3) Germany at
\$50 million; and (4) The Netherlands at \$43 million. In 2004, U.S.
assistance to South Africa increased to \$160 million, reflecting
significant inflows from the President\'s Emergency Plan for AIDS Relief
(PEPFAR). As PEPFAR continued to grow, U.S. assistance to South Africa
totaled over \$185 million in 2005.

Q: Which U.S. government agencies maintain offices in South Africa?

A: Apart from the Department of State, approximately 28 U.S. agencies
manage cooperative programs in South Africa, including the U.S. Agency
for International Development (USAID), Peace Corps, Department of
Commerce, Department of Agriculture, Department of Defense, Department
of Homeland Security, and Department of Health and Human Services.

Q: What is the level of engagement of the U.S. government in business
and economic development in South Africa?

A: A key economic partner for South Africa, the United States is the
country's second largest trading partner and largest source of foreign
investment. U.S.-supported programs in South Africa focus on fostering
business linkages and training within South Africa, the region, and
internationally (primarily to the U.S. market) as an approach to
creating sustainable jobs and supporting South Africa\'s democracy. The
United States believes that both strong private and governmental sectors
are critical to the consolidation of democracy in South Africa.

Q: Why is the United States interested in helping Africa/South Africa?

A: A prosperous and stable South African society benefits
everyone---South Africans, other Africans, and Americans. South Africa
is an economic anchor for Africa and is critical to strengthening the
continent's economic and political stability. In turn, this stability
has a positive impact worldwide. U.S.-South African trade benefits both
nations in terms of jobs and income.

Q: Why is the United States interested in the South African labor union
movement and what is it doing with the South African labor sector?

A: The United States has had a long history of promoting democratic free
trade unions and actively supports core labor rights as intrinsic to the
functioning of a democratic society. Through USAID and the U.S.
Department of Labor, the U.S. government funds a variety of activities
and projects aimed at strengthening trade union capacity, combating
HIV/AIDS in the workplace, and eliminating child labor.

**[Trade]{.underline}**

Q: What is the nature of the U.S.-South Africa trade relationship?

A: The United States is South Africa\'s third largest single export
country, accounting for nearly 10% of 2005 total exports. South Africa's
exports to the United States rose by 21% from 2003 to 2004 and remained
at that level in 2005. Total bilateral trade was \$9.5 billion in 2004,
as South Africa\'s exports to the United States were \$5.9 billion and
its imports from the United States were \$3.7 billion.

Q: What are the largest import and export categories between the United
States and South Africa?

A: Machinery and equipment is the largest import category from the
United States to South Africa and accounts for over 30% of South African
imports from the United States. South Africa\'s main export to the
United States is precious metals and stones, accounting for over 30% of
total exports to the United States.

Q: What is the African Growth and Opportunity Act (AGOA)? How has it
benefited South Africa?

A: AGOA, U.S. legislation passed in 2000, currently provides 37 eligible
countries in sub-Saharan Africa with the most liberal access to the U.S.
market available to any country or region with which we do not have a
Free Trade Agreement. As a result of AGOA, the U.S. provides duty-free
access to substantially all exports of sub-Saharan Africa; more than 98%
of U.S. imports from AGOA eligible countries enter the U.S. duty-free.
In 2005, total AGOA exports to the United States rose 44% to \$38.1
billion. The AGOA portion of South African exports to the United States
totaled \$1.5 billion in 2005. In 2005, South Africa was one of the top
five beneficiaries of AGOA. For more information on AGOA visit
www.agoa.gov.

Q: Why is the United States seeking a Free Trade Agreement (FTA) with
the South African Customs Union (SACU)?

A: The United States is building on the success of increased trade from
AGOA. As envisaged in AGOA, President Bush has directed the
Administration to negotiate a trade-expanding agreement with SACU to
enhance our bilateral trade and investment relationship with them and to
facilitate SACU\'s integration into the global economy. An FTA provides
a more stable, predictable and favorable framework for trade and
investment. The United States believes that a prosperous, healthy and
stable Africa is in the U.S.'s best interests and contributes to its
global efforts to foster worldwide economic growth and increased trade.
An FTA between the United States and SACU will be good for all of us and
will serve as a model for the rest of sub-Saharan Africa.

Q: Why should SACU want a Free Trade Agreement (FTA) when we have AGOA?
What is the difference?

A: An FTA is permanent and is comprehensive, while AGOA expires in 2015
and only reduces tariffs on certain products. The FTA would cover not
only tariffs, but also establish new disciplines on trade related
issues, including services, investment, government procurement,
electronic commerce, labor and environment. By moving from one-way trade
preferences to full partnership through a reciprocal free trade
agreement, the U.S. and SACU can expand market access, further link
trade to southern Africa's economic development strategies, encourage
greater foreign investment, and promote regional economic integration
and growth.

Q: Which countries or regions does the United States have an FTA with?

A: In addition to the North American Free Trade Agreement (NAFTA) with
Canada and Mexico, the United States has concluded and is implementing
FTAs with Australia, Chile, Israel, Jordan, Morocco, and Singapore. The
United States has also signed FTAs with five Central American countries
(CAFTA) \-- Nicaragua, Honduras, El Salvador, Costa Rica, and Guatemala
\-- and the Dominican Republic, and Bahrain, and is in the process of
FTA negotiations with the Andean Pact (Columbia, Bolivia, Peru, and
Ecuador) and Panama. Visit http://www.ustr.gov for more information on
U.S. free trade agreements.

Q: Do free trade agreements actually benefit workers?

A: Free trade agreements can improve prosperity for all, including
workers. Production in goods covered by such agreements increases, which
generally results in further job creation. As tariffs are lowered or
removed, the price of imported products declines and workers find these
products more affordable. Free trade agreements can also result in
additional foreign direct investment, which often bring substantial job
creation to countries with low wage rates. U.S. FTAs also encompass a
commitment by participants to enforce their own labor laws and take
steps to guarantee core labor rights.

Q: How do I find out if a product is eligible for AGOA tariff
preferences?

A: Most products are eligible for AGOA preferences with few exceptions.
You can search by product description or Harmonized Tariff Schedule
(HTS) number at http://www.agoa.gov under "product eligibility."

Q: How do I find out if there is a tariff on a particular agricultural
product?

A: See http://www.cargoinfo.co.za, or call the Embassy\'s Agriculture
Office at 012-431-4057.

Q: How do I find out what the sanitary or phyto-sanitary requirements
are to export a food or agricultural product to the United States?

A: See http://www.usda.gov/ppq/permits or call the Embassy\'s
Agriculture Office at 012-431-4057.

Q: Where can I find information on U.S. sanctions on a specific country?

A: Information is available from the U.S. Department of the Treasury,
Office of Foreign Assets control. The website is
http://www.treas.gov/offices/enforcement/ofac.

**[Doing Business In South Africa]{.underline}**

Q: What is the best way to enter the South African market?

A: The U.S. Commercial Service (http://www.buyusa.gov/southafrica/en/)
can best assist you in entering the South African market by providing
counseling and contacts for your specific product or service. Most U.S.
firms appoint a distributor for their product as the first step of
market entry. Other resources include the American Chamber of Commerce
(http://www.amcham.co.za) and the South African Department of Trade and
Industry (http://www.dti.gov.za).

Q: What are the best prospects for U.S. firms in South Africa?

A: The U.S. Commercial Service has identified the following industry
sectors as the best prospects for U.S. firms in South Africa: electrical
power systems, oil and gas, defense, airport/ground support equipment,
telecommunications equipment, automotive parts/service equipment,
medical equipment, pollution control equipment, and healthcare services.

Q: What U.S. agricultural products have the most potential in the South
African market?

A: In addition to U.S. wheat and cattle hides, a variety of high-value
products such as almonds, cultivated ginseng root, canned salmon,
bourbon, frozen food preparations, and sauces have shown consistent
growth over the last five years and represent important opportunities
for U.S. exporters. For more information, see
http://www.fas.usda.gov/markettradedata.asp. If you click on \"Attache
Report Search,\" you can find the guide to exporting foods and beverages
to South Africa (GAIN report #SF4030).

Q: How developed is the infrastructure in South Africa (i.e., how can I
distribute my goods there)?

A: South Africa has a world-class infrastructure system. Durban is the
largest container seaport in Africa and is located on the east coast of
South Africa. Johannesburg airport is the hub of southern Africa's
transport network. There is a well-developed road system to transport
goods from ports and airports throughout the country.

Q: What are some of the challenges of promoting business and economic
development in South Africa, and how are they overcome?

A: In South Africa, the largest challenge is that the legacy of
apartheid denied opportunities to many, leaving the large majority of
the potential labor force poorly educated, unskilled, and without access
to capital and resources. The U.S. government\'s response to this has
been to develop programs that provide professional technical expertise
in areas such as commercial farming, finance, marketing, and quality
standards certification.

Q: What are the implications of HIV/AIDS for U.S. business in South
Africa?

A: South Africa has the largest number of HIV infected citizens in the
world (more than 5 million). Up to 20% of the adult population is
thought to be HIV-positive and AIDS is the leading cause of death in the
country. The South African business community has begun to address the
problem through a variety of initiatives and programs. U.S. companies
should familiarize themselves with the disease and research strategies
to address its implications within their business plans. Several U.S.
companies have been leaders in workplace HIV/AIDS programs in South
Africa. For more information, contact the South African Business
Coalition on HIV/AIDS (SABCOHA) at http://www.redribbon.co.za/business/.

Q: What is Black Economic Empowerment (BEE)? How does it affect U.S.
companies investing in South Africa?

A: South Africa\'s Department of Trade and Industry (DTI) describes BEE
as a socio-economic process that is contributing to the economic
transformation of South Africa and bringing about significant increases
in the number of black people who manage, own, and control the
country\'s economy, as well as significant decreases in income
inequalities. While DTI is rolling out overall BEE guidelines, nearly
every industry is developing its own charter detailing its requirements.
Details on the BEE guidelines and BEE charters can be found on the DTI
website at http://www.dti.gov.za. U.S. firms operating in South Africa
support BEE, however, requirements to transfer equity to locally-owned
BEE entities are inconsistent with some firms' management practices or
policies. You may contact the American Chamber of Commerce
(http://www.amcham.co.za) or the Foreign Commercial Service via email at
Johannesburg.office.box@mail.doc.gov for additional information.

*Note: Under its BEE policy, the South African Government uses the
generic term \"black people\" to describe Africans, Coloureds (South
African term for mixed race), and Indians.*

Q: Does the United States support the Agriculture Black Economic
Empowerment (AgriBEE) Plan?

A: The United States supports the underlying goals of the AgriBEE,
particularly its emphasis on development and on moving historically
disadvantaged people into the mainstream of the national and global
economy. The success of the AgriBEE agricultural and management targets
depends heavily on timely and rapid achievement of its extremely
ambitious literacy and education goals. In the long run, AgriBEE should
be conducive to supporting U.S.-South African investment and trade.

**[Travel/Immigration/Customs]{.underline}**

Q: How do I get a U.S. visa?

A: Visit the consular section of the Embassy's website at
http://pretoria.usembassy.gov/wwwhst1.html for information on applying
for a U.S. visa.

Q: Can I take biltong to the United States?

A: No. You cannot take any unprocessed meats into the United States,
primarily because Southern Africa has Foot and Mouth Disease while the
United States does not. Sniffer beagle dogs will smell it, and U.S.
Department of Agriculture officials will seize it at the airport. Other
fresh products, such as proteas or fruit, are also not permitted to be
taken to the United States.