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US trade representative says AGOA suspension will be lifted if issues agreed

US trade representative says AGOA suspension will be lifted if issues agreed
Minister Rob Davies
Published date:
Friday, 06 November 2015
Author:
Linda Ensor

Trade and Industry Minister Rob Davies said he had been given the assurance by US trade representative Michael Froman on Thursday that the threatened suspension of SA from the African Growth and Opportunity Act (Agoa) benefits would be lifted as soon as there was agreement on the outstanding issues.

Mr Froman phoned Mr Davies on Thursday ahead of US President Barack Obama’s letter to Congress warning of a possible suspension.

Mr Davies said at an urgently convened press conference on Friday that South African and American veterinarians were meeting on Friday to thrash out the outstanding issues.

“We believe we are close,” said Mr Davies. He conceded that the negotiations had taken longer than expected and had not been easy but insisted that the outstanding issues would be resolved within the 60-day deadline imposed by Mr Obama.

“SA believes that it is on track to meet the December 31st deadline to resume imports of us poultry into SA,” the minister said. “The reason the work has not been completed is due to the fact that both sides have had to engage on the documentation and negotiate the texts. Both sides have had to consider and evaluate these texts carefully before making submissions and proposals,” he said.

“These issues are about animal health and are very complex — a balance has to be found between trade opening and animal health.” Mr Davies said he could not dictate to the vets who were negotiating these agreements as they had to take the decisions on the basis of their professional knowledge.

The minister defended himself against accusations by the Democratic Alliance that he had bungled the negotiations, saying that he was “very happy” with his record and had “nothing to be ashamed about”.

He said the question of allowing the import to SA of meat and poultry from US states that were not affected by diseases such as avian flu and mad cow disease had been finalised. The only issues remaining were dealing with the salmonella contamination of meat and an exit clause dealing with the expiry of the agreements.

Gone in 60 days

Mr Obama said on Thursday that SA had until January 4 to satisfy him that it was complying with the eligibility requirements to enjoy duty-free access for its agricultural products under Agoa.

Losing the duty-free status afforded by Agoa could affect US orders for South African citrus, which were valued at $57m through the first nine months of this year; macadamia nuts, worth $43m in 2014; and wine, worth $33m in 2014.

According the US International Trade Commission’s website, the "normal trade relations" duty on shelled macadamia nuts is $0.05/kg; on citrus, $0.019/kg; and on wine, $0.063/l.

However, the weakness of the rand against the dollar could mitigate the effect of duties on the competitiveness of those products in the US market.

"I am taking this step because SA continues to impose several longstanding barriers to US trade, including barriers affecting certain agricultural exports," Mr Obama said in a letter announcing his decision to Congressional leaders.

"I have determined that SA is not making continual progress toward the elimination of barriers to US trade and investment as required by section 104 of Agoa."

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