TRALAC - Trade Law Centre

South Africa's AGOA benefits in spotlight after US Senate move

Friday, 24 April 2015 Published: | Simon Barber

Source: Business Day

The Obama administration would have to undertake a sweeping review of SA’s eligibility for African Growth and Opportunity Act (AGOA) benefits under an amendment adopted unopposed by the Senate finance committee on Wednesday.

However, no similar measure was adopted in the house ways and means committee on Thursday when it unanimously approved Agoa extension legislation in the form it was first introduced last week.

Offered by Georgia Republican Senator Johnny Isakson, the Senate amendment was meant to strengthen the hand of the USA Poultry and Egg Export Council (USAPEEC) in negotiations with the South African Poultry Association (SAPA) over the tonnage of an import quota for US frozen chicken portions.

The US and SA have agreed that the two industry groups should seek an accommodation based on the share of imports US producers had before the imposition of anti-dumping duties in 2000. SAPA CEO Kevin Lovell said on Thursday he was awaiting USAPEEC’s response to SAPA’s latest offer.

Trade and Industry Minister Rob Davies and Senator Chris Coons, the Delaware Democrat who is batting for USAPEEC with Sen Isakson, had a teleconference on Thursday to discuss the state of play.

Speaking as the finance committee readied for the full Senate a package of trade bills that included the 10-year renewal of Agoa, Mr Isakson said he was dropping a proposal to limit SA’s Agoa “participation” to three years.

In its place, he proposed to tweak the Agoa reauthorisation bill introduced while Mr Davies was in Washington last week, by obliging — rather than simply inviting — the office of the US trade representative to launch an “out-of-cycle” review of SA within 30 days of the bill becoming law.

As the amended bill is now worded, the trade representative, in assessing SA’s Agoa eligibility, would have to look well beyond the chicken dispute. The review would be conducted regardless of whether the dispute was settled.

Mr Isakson said the purpose of the review was “to have people held accountable for their trade policies and practices …. We are standing up for open markets and open trade. SA is the largest beneficiary of Agoa. It should be the most co-operative player.”

Separately, the Agoa renewal bill allows US businesses to petition the trade representative to deny benefits to SA and other countries whose tariffs discriminate against US goods as a result of their trade agreements with the European Union.

The timing of the review, assuming the Isakson amendment survives on the Senate floor and is accepted by the House of Representatives, depends on when the legislation is signed into law.

It is also tied to the fate of the Trade Promotion Authority bill freeing President Obama to completing negotiation with 11 Pacific Rim nations of the Trans-Pacific Partnership. The Senate finance committee approved the bill by 20 votes to 6.

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