TRALAC - Trade Law Centre

South African team in bid to salvage AGOA deal

Wednesday, 04 March 2015 Published: | Wiseman Khuzwayo

Source: Business Report

South Africa had dispatched a delegation to Washington this week to discuss with Congress ways to amicably resolve an impasse over US poultry imports, Trade and Industry Minister Rob Davies said.

This dispute was threatening Pretoria’s continued participation in the preferential trade scheme, the African Growth and Opportunity Act (Agoa), Davies added.

Speaking at a BrandSA/ Business Report Dialogue, Davies said he was optimistic South Africa would retain its participation in Agoa. “I am very hopeful,” he said in Johannesburg on Monday evening.

Speaking from Washington, Kevin Lovell, the chief executive of the SA Poultry Association, said the South African “delegation had been in the US capital since Monday”.

Lovell said: “This is a unilateral trade agreement by the US. It therefore requires a political decision as well as a trade one to renew it.”

The 15-year-old preferential trade scheme is up for renewal by Congress in September, but doubts about South Africa’s participation have emerged after Senator Chris Coons of Delaware and his Republican counterpart Jonny Isakson of Georgia mounted a push for South Africa to lower tariffs on some US chicken imports or risk losing its Agoa benefits.

In 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”.

The delegation included representatives of the South African Poultry Association, according to Davies.

Davies and US Trade Representative Michael Froman met at the end of January on the margins of the World Economic Forum’s annual meeting in Davos as part of a stepped up effort to resolve the poultry dispute and ensure South Africa’s continued participation in Agoa. Davies said at the time the process to tackle the issue had reached a stage where concrete offers were being made to resolve the matter.

David Wolpert, the chief executive of the Association of Meat Importers and Exporters of SA, said in a letter to Business Day on Monday: “It makes sense for SA to demonstrate real commitment to remaining within Agoa and nurturing trade relations with the US. We need Agoa to be renewed – for the industry and economy.”

Illegal ban

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

The preferential trade scheme permits the duty-free import into the US of several types of goods from sub-Saharan Africa. Davies said there was a push by Africa for Agoa to be renewed for the next 15 years.

Besides the poultry impasse, the other argument for South Africa’s exclusion is its position as one of the most developed nations in Africa. But according to a policy briefing released last month by Christopher Wood, a researcher at SA Institute of International Affairs, contends that larger African states, including South Africa, should be included in the deal.

“While it is true that Agoa was not initially envisioned as catering to a middle-income Africa, it is impossible to disconnect the future of these large states from the rest of the continent.”

He said smaller and less developed African countries remain reliant on the industrial base of their larger neighbours in order to access the US market, and the subsequent regional value chains.

Wood said Agoa had seen numerous success stories since its commencement in 2001, such as the growth of automotive exports from South Africa to the US, but the broader picture had been disappointing.

He said the legislation must be renewed by the highly divided Congress by September. Wood said yesterday it was highly unlikely South Africa would be excluded from the renewed Agoa.

In his policy briefing paper, Wood said while the Obama administration and Froman had consistently thrown their weight behind a full renewal of Agoa, the bill must pass through a bitterly divided Congress.

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