AGOA renewal could jeopardise SA-EU trade agreements
Even if the US-SA chicken dispute is resolved, legislation to renew the African Growth and Opportunity Act (Agoa) is likely to include a new eligibility requirement conditioning benefits on countries not discriminating against US products.
The implications for SA and its relations with the EU could be serious. The US would in effect be demanding the same access to the South African market as the EU without the give and take of negotiations on a free trade agreement or the US having to make binding commitments in return.
This emerged amid indications that Agoa reauthorisation could be introduced in the both the Senate and House of Representatives next week, well ahead of its expiry date in September.
The office of the US Trade Representative, in its latest foreign trade barrier report, highlighted complaints by US companies that they were facing higher tariffs in SA than their EU competitors on a significant range of products.
Trade and Industry Minister Rob Davies said on Wednesday that the office was pressuring SA to give the US the same preferential access it had granted the EU under the SA-EU Trade and Development Co-operation Agreement.
Under international trade rules, SA could not do this for the US alone but would have to make the same tariffs available to everyone, effectively wiping out preferences the EU purchased from SA with concessions of its own.
Mr Davies is in Washington for consultations under the the US-SA trade and investment framework agreement and to press for the 15-year renewal Agoa on terms favourable to SA.
How SA fares in a new Agoa will depend in part on whether the South African Poultry Association and the USA Poultry and Egg Export Council have reached agreement on the tonnage of frozen chicken portions US producer will be able to sell into SA at normal tariff rates.
SA’s new ambassador to the US, Mminwa Mahlangu, told Agoa supporters on Thursday that in the latest exchange of offers, US poultry council had demanded 125 000 tonnes, while the SA poultry association proposed 45 000 tonnes.
Senators championing the US chicken industry, led by Republican Jonny Isakson of Georgia and Democrat Chris Coons of Delaware, are proposing to make SA’s continued enjoyment of Agoa benefits contingent on a deal being struck.
Mr Mahlangu said the senators had told Mr Davies they would would offer an amendment to have South Africa "graduated" from Agoa after three years unless The Office of the US trade representative certified it had met certain conditions. The office would be required to review SA’s compliance every six months throughout the probation period.
The senate finance committee is expected to mark up — that is, ready for action by the full senate — an Agoa bill next week.
Congressman Ed Royce, chairman of the house foreign relations, said the house might also take up its version of the bill next week.
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