South Africa: DTI cleans up after AGOA flap
Bilateral Trade by Sector: United States - South Africa
Value ('1000 dollars) / Year-to-date to September
The Department of Trade and Industry has sought to relieve concerns that SA could lose out on thousands of jobs and billions in exports.
In a statement issued on Wednesday, the department reacted to President Barack Obama’s hardline stance that SA must abide by the conditions in the African Growth and Opportunity Act (AGOA) by March 15, or lose out on its benefits.
Obama was insisting that SA must get US products, notably poultry, onto SA’s shelves by the middle of next month.
His Monday announcement followed last week’s last minute agreement between the two countries on issues related to health standards on US chicken exports to South Africa.
On Monday, the US said “suspending the application of duty-free treatment to certain goods would be more effective in promoting compliance by South Africa with such requirements than terminating the designation of South Africa as a beneficiary”.
The AGOA accord favours 39 African nations by eliminating import levies on more than 7,000 products ranging from textiles to manufactured items, Bloomberg notes.
To remain a beneficiary, SA must to cut barriers to US trade and investment, operate a market-based economy, protect workers’ rights and implement economic policies to reduce poverty.
However, the DTI now says “all” SA’s AGOA benefits are still in place, and the suspension of agriculture benefits on March 15 will be lifted as soon as the first shipment of poultry enters the South African market.
Last week, US Trade Representative Ambassador Froman said, “We are pleased that South Africa and the United States reached agreement to resolve barriers to US poultry, pork and beef.” However, he indicated that the US required to see “American product in local stores” before the final benchmark to lift any threat of suspension is reached.
South Africa’s Departments of Trade and Industry and the Department of Agriculture, Forestry and Fisheries are working closely with the local US Embassy, local importers and US exporters, to facilitate the first shipments of US poultry under the agreed quota for US bone-in-chicken pieces, says DTI.
“We are thus confident that the first shipment will arrive in the next few weeks and the US president will consequently revoke the above proclamation.”
Analysts on Tuesday noted that, while the pending suspension was easily overcome and likely amounted to paperwork, should SA loss out on AGOA, it would dent the economy.
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