The term southpaw is definitely an American term for a left-handed person. Since most ball fields are designed so that batters face east, pitchers would be facing west and if they were left-handed, their south-sided arm would be their pitching arm.
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Ballparks are often designed so that batters are facing east, so that the afternoon or evening sun does not shine in their eyes. This means that left-handed hurlers are throwing with their south-side arm.