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Minister Davies in bid to save South Africa's AGOA access

Minister Davies in bid to save South Africa's AGOA access
Published date:
Monday, 26 January 2015
Author:
Ellis Mnyandu

Trade and Industry Minister Rob Davies has met with US Trade Representative Michael Froman as part of a stepped up effort to resolve a dispute involving US chicken imports into the local market and ensure South Africa’s continued participation in the preferential trade scheme, the African Growth and Opportunity Act (Agoa).

The meeting took place on the margins of the World Economic Forum’s annual meeting, which concluded on Saturday in Davos, Switzerland.

Davies told Business Report that the process to tackle the issue had now reached a stage where concrete offers were being made to resolve the matter. “This work has been ongoing,” said Davies.

He said that the process entailed “bringing our poultry associations together to work on a programme which would provide some additional market access for US poultry products, but which would also have a developmental component – which involves investments by US companies, training, skills development and support for intra-Africa trade.”

In the past year there has been a push for South Africa to lower tariffs on some US chicken imports, a campaign spearheaded by Senator Chris Coons of Delaware and his Republican counterpart Jonny Isakson of Georgia.

Last January the National Chicken Council and the USA Poultry and Egg Export Council testified before the US International Trade Commission on the matter, and warned South Africa to lift the imposition of dumping duties from US poultry products and allow trade to resume “fairly and without restraint” or risk losing its Agoa preferences.

Delaware Online reported Coons last week as saying: “I will find a way to prevent South Africa from benefiting from Agoa if we cannot resolve their illegal ban on the importation of US poultry.”

Entry into the South African market of US poultry would be one way of helping offset the ban imposed by Russia on US poultry imports, according to analysts.

Davies said “while there is still no firm date on when the US Congress will engage on the Agoa re-authorisation issue, it is possible that this may happen in the next month or two.

“We indicated to the US trade representative, Michael Froman, that the dialogue between our two poultry associations had now reached the point of exchange of offers. He noted and welcomed the progress,” said Davies.

According to Davies, the government would respond to what the poultry industry players came up with, but he added that a settlement deal would involve an offer on quota or tonnage. He said he was “a bit surprised” by the threats involving South Africa’s Agoa status.

“We hope that (the offers) will create the momentum for the re-authorisation of Agoa with South Africa included. That’s what we are looking to achieve,” said Davies.

Although President Barack Obama’s administration supports Agoa’s renewal, the decision will be made by Congress and some US business interests and legislators want South Africa to be “graduated” because it is an upper middle-income country and because they say it is discriminating against US imports.

Tom Donohue, the president and chief executive of the US Chamber of Commerce, told President Jacob Zuma in August that the chamber was lobbying Congress hard for a renewal of Agoa with South Africa in it.

But he said South Africa needed to protect US intellectual property rights and trademarks, strengthen investor protections, repeal anti-dumping measures “and settle ongoing issues over ownership of foreign-headquartered firms”.

Officials said South Africa was responding to these complaints by considering the introduction of a tariff rate quota agreement, which would allow a quota of US chicken imports into the local market at lower tariffs.

 

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