TRALAC - Trade Law Centre

SA must hold the line on AGOA - Pan-African Business Forum

Wednesday, 08 April 2015 Published: | Ellis Mnyandu

Source: Business Report

South Africa’s continuing spat with the US over its poultry exports has galvanised a group of leading African business people, entrepreneurs and key influencers to call on Pretoria not to give into Washington’s demands that South Africa grant duty-free access to US poultry. They argue that to do otherwise will harm Africa’s interests.

The call by the Pan-African Business Forum (PABF) comes as Pretoria scrambles to hammer out a deal that will ensure South Africa’s continued participation in a key US-Africa preferential trade scheme known as the African Growth and Opportunity Act (Agoa).

Escalation

Additionally, the call also marks a potential escalation of the dispute since the PABF represents many other voices on the African continent, wary of the apparent pressure that Washington appears to be piling on South Africa in the run up to Agoa’s renewal before it expires in September.

Without some sort of deal that the US deems acceptable, South Africa increasingly risks being kicked out of Agoa, through which the country has derived duty-free access to the US market for various products, including cars, wine, citrus and textiles.

Ladislas Prosper Agbesi, the chairman and chief executive of the PABF, said yesterday that the whole of Africa was ready to stand behind South Africa in its bid to realise a resolution that would not harm Africa’s interests in the long run. “We are asking other African countries to support South Africa,” Agbesi told Business Report in an interview.

“As the Pan-African Business Forum,” he said, “we want to come to Minister Rob Davies’s support. He’s doing something very creative. But further more, we want him to not change his position because that’s something that will affect the other African countries.”

Asked to clarify his statement, Agbesi said the PABF wanted the status quo to remain.

The PABF is a private initiative, devised by Africans, to accelerate the socio-economic development of the continent, through a combination of carefully considered programs and projects developed both by Africans locally, and in collaboration with development partners outside of the continent.

As South Africa’s Minister of Trade and Industry, Davies has been at the forefront of the on-and-off deliberations between the South African government and US officials over Washington’s push for South Africa to scrap anti-dumping duties on US poultry products.

Next week Davies is scheduled to travel to Washington where more discussions will be held in the hope of helping defuse the dispute. Those discussions will be preceded by talks between the USA Poultry and Egg Export Council (Usapeec) and the South African Poultry Association (Sapa) from April 12 in Europe.

In jeopardy

Barring South Africa from Agoa will cost Pretoria as much as $2.5 billion (R29.3bn) in benefits and put thousands of jobs – from the automotive sector, to agriculture, to textiles – in jeopardy. The meetings in Washington will also cap almost a month of high-stakes posturing involving US lawmakers and Sapa.

Last week 13 US senators wrote to Davies urging him to “continue to work with Sapa and encourage its leaders to not shut the door on negotiations”.

Separately, the National Chicken Council, a US poultry industry trade association, sent a letter to South Africa’s newest ambassador to Washington, Mninwa Mahlangu, conveying to him US concerns about South Africa’s position.

“If the issue of our exclusion from the South African market is not addressed very soon, we will be forced to oppose any renewal of Agoa for South Africa,” Mike Brown, the council’s president wrote to Mahlangu, according to a copy of the letter seen by Business Report.

But more than anything, Agbesi’s comments yesterday provide the clearest indication to date that the ramifications of the poultry spat between South Africa and the US could be more far reaching than previously thought.

Agbesi said in the event that South Africa was kicked out of Agoa because of the poultry dispute, Pretoria should then take the matter to the Brics, a group of some of the world’s key emerging markets, comprising Brazil, Russia, India, China and South Africa.

“If they do anything like that, no US poultry must go to the Brics. If America does not want to accept (the South African position), then no US poultry must go to the Brics. South Africa is in a battle right now and we need Brics to be strong or else they must destroy it,” Agbesi said.

He said South Africa’s dispute with the US presented Africa with a unique opportunity to chart a new course in its trade relations with the US. “Agoa is good, but it should not be used as a way to blackmail us,” Agbesi added.

“We must support our industry here. Our countries are ready for a new golden age of Africa’s growth,” he said. 

* Ellis Mnyandu is editor of Business Report. 

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