South African government asked to challenge bid to block US imports
The United States government has asked the South African government to challenge an attempt by South African poultry and pork producers to once again block US imports of those products into South Africa.
Health restrictions which had blocked the import of US poultry, pork and beef for many years were only lifted earlier this year after protracted negotiations between the two governments.
The SA Poultry Association (SAPA) and SA Pork Producers Organisation (SAPPO) have gone to court seeking orders which would block the imports again.
SAPA and SAPPO said lifting the health restrictions has exposed South African consumers to salmonella bacteria in US chicken porcine reproductive and respiratory syndrome (PRRS) in US pork.
Lifting the long restrictions on US meat imports was the main condition for South Africa to continue enjoying duty-free access to the US for key exports under AGOA- the African Growth and Opportunity Act.
Last week, James Sumner, president of the US Poultry and Egg Export Council (USAPEEC) said if SAPA and SAPPO won their court cases and US poultry and pork imports were again blocked, “it probably would - and should - trigger another out-of-cycle review under AGOA”.
Threatened
Such a review would once again threaten South Africa's AGOA market access benefits. Automobiles, wines and fruits have been the biggest exports. Laird Treiber, economic counsellor at the US embassy in Pretoria, said during a phone press conference on Thursday that the US had asked the South African government to challenge the SAPA and SAPPO cases.
He would not say if there would be another AGOA out of cycle review if the applications succeeded. Treiber said the US was satisfied that trade in US poultry, pork and beef was again flowing since the health restrictions had been lifted. However US poultry sales in SA were only about one third to one half of what the US had expected.
A 65 000 ton annual quota had been negotiated. Sumner had given various reasons for the low sales, mainly higher prices of US poultry which still carry 37 percent import duties, whereas European Union poultry enters SA duty free. But US poultry exporters say some SA supermarket chains are not buying US poultry because SAPA has succeeded in putting a health stigma on it. Treiber said there had been limited shipments into SA of US beef so far and only a test shipment of pork.
He also reported back on the AGOA Forum which was held in Washington last week where US and African governments discussed moving towards a more reciprocal trade relationship between the US and Africa when the current iteration of AGOA expires in 2025. AGOA allows duty-free access to the US market for up to 6 500 different African products but does not require duty-free access for US exports into African markets.
The US wants a more balanced, reciprocal trade relationship, although Treiber stressed that Washington was not demanding fully reciprocal free trade agreements with the much smaller African economies Other options could be considered, such as African countries binding tariff lines, or lifting tariffs in only some areas such as information and renewable energy technologies and facilitating smoother trade and improving their climates for both international and domestic business.
More access
The US was also ready to consider giving the African countries greater access to the US market that they gave to their markets. He added that even the US and South African governments would probably discover they were much closer to each other than South Africa now expected, once they sat down and started talking about a trade deal. SA Trade and Industry Minister Rob Davies told Nedlac last month that he did not think SA and the other members of the Southern African Customs Union (Sacu) would be able to negotiate a free trade area with the US because the US template for free trade agreements was too demanding and inflexible.
It included things like labour and environmental standards and US access to government procurement which would clash with South Africa's industrialisation policy, Davies had said.
But Treiber said that South Africa already had very robust laws in areas such as labour, environmental protection and protection of investment. The Economic Partnership Agreement which SA and the other SACU countries plus Mozambique had recently signed with the European Union contained much of what the US would want in a free trade agreement with them.
Treiber confirmed that it was the growing disadvantage which US exporters were suffering in African markets relative to their EU and other international competitors, that had prompted Washington to begin exploring a more reciprocal, post-AGOA trade relationship.
Read related news articles
South Africa walks a tightrope on US relations
South Africa has been conducting a high-wire act in its relations with the United States (US). It is maintaining friendships with Washington’s enemies like Russia, Iran and China while trying to avoid disrupting its economic relations with America. Tensions came closer than ever to breaking point this month as the US House of Representatives’ Committee on Foreign Affairs passed the US-South Africa Bilateral Relations...
28 March 2024
Remarks by Deputy Treasury Secretary Adeyemo on the US-South Africa economic relationship
As Prepared for Delivery in Johannesburg, South Africa Thank you for the warm welcome. I want to express my gratitude to Consul General Spera and the American Chamber of Commerce for hosting me. I am honored to be joined today by South African Entrepreneurs that are building companies to unlock the economic potential of their country. I owe my own presence here today to the inspiration I drew from South Africa. In the middle of the...
13 March 2024
South African president Ramaphosa meets with US congressional delegation
South African President Cyril Ramaphosa today, 21 February 2024, received for a visit from a bipartisan congressional delegation from the United States of America, in Tuynhuys, Cape Town. The delegation is visiting South Africa at the invitation of the Aspen Institute. The President and the US congressional delegation discussed the importance of the relationship between South Africa and the US, which manifests in strong economic,...
21 February 2024
US congress receives Bill to review South Africa relations
A bill has been submitted to the United States congress calling for a full review of the country’s bilateral relationship with South Africa following the International Court of Justice ruling that found it plausible that Israel has committed acts of genocide against Gaza. The bipartisan bill which was introduced by US Republican congressman John James and Democratic Party congressman Jared Moskowitz this week could threaten South...
09 February 2024
Fitch research unit expects better AGOA deal for South Africa
Fitch’s research arm, BMI, believes SA has done enough to get improved trade terms under the African Growth & Opportunity Act (Agoa), which it expects to be extended and modified before its expiry in September 2025. But it warns that the deal might be stillborn if Donald Trump is elected US president. The research think-tank said in a note it assigns a 65% probability that Agoa will not only be renewed but modified to the benefit of...
09 January 2024
South Africa: BLSA CEO calls for more companies to leverage AGOA opportunities
Many more South African companies could benefit from the African Growth and Opportunity Act (AGOA), which gives eligible countries access to US markets free of tariff barriers, business organisation BusinessLeadership South Africa (BLSA) CEO Busi Mavuso writes in her weekly newsletter. Apart from mainstream formal sector businesses, there are opportunities to enable more entrepreneurs, including women-led...
20 November 2023
US ambassador: AGOA is an opportunity to deepen ties between the US and South Africa
President Joe Biden last December at the US-Africa Leaders Summit affirmed that the US will elevate its relationship with Africa. The future is Africa. One example is its youthful population: the median age on the continent is 19. By 2050, one in four people in the world will be in Africa. The US wants them to be healthy and wealthy. What happens in Africa will affect the rest of the globe — and we want to work together to ensure it is...
09 November 2023
US Senator Chris Coons proposes AGOA extension by 16 years, immediate review of SA’s AGOA eligibility
Powerful US Democratic Party Senator Chris Coons is circulating a discussion draft of a Bill to renew the African Growth and Opportunity Act (Agoa) for 16 years that would also require an immediate “out-of-cycle” review of South Africa’s eligibility for Agoa. That could lead to South Africa being removed next year from the programme, which has provided considerable benefits to SA exporters to the US of cars, fruits and wine, in...
07 November 2023
AGOA benefits extend beyond trade [incl. VIDEO of Friday's opening session]
Economies in Sub-Saharan countries stand to benefit far more from the African Growth and Opportunity Act (AGOA) than notable trade statistics, says President Cyril Ramaphosa. “AGOA enhances the diversification of African economies, enabling them to export value-added products. By enabling African countries to have preferential access to the US market, this opportunity incentivises African countries to develop and export value-added goods...
06 November 2023
South Africa pins its hopes on an early 2024 US Congress renewal of AGOA
South Africa’s government is hoping that the process to renew the African Growth and Opportunity Act (Agoa) by the US Congress will be concluded by early 2024, ensuring that more than 20 African countries continue to have duty-free access to the world’s largest economy. This is the first time that the South African government has given a timeline for when it hopes the US Congress might extend Agoa, which has been renewed twice...
05 November 2023
SA trade minister Patel expresses confidence at media briefing about South Africa’s continued inclusion in AGOA
Ahead of South Africa hosting the US-AfricaTrade and Economic Cooperation Forum – also called the AGOA Forum – from November 2 to 4, Trade, Industry and Competition Minister Ebrahim Patel on October 26 briefed the media on the state of readiness for the forum, expressing confidence that the South African government’s relations with the US were strong. Various South African stakeholders have been motivating for...
26 October 2023