The US Senate’s recent passing of a bill extending the African Growth and Opportunity Act (Agoa) for 10 years with SA indicates that this unilateral preference scheme enjoys sufficient support in the US.

However, for SA the negative sentiment about its continued inclusion among Agoa beneficiaries found its way into the draft bill and sends a strong message that better market access arrangements into the US is needed as a matter of urgency to ensure it is not subject to the whims of US legislators pandering to domestic interest groups.

The challenges of depending on a unilateral preference scheme are illustrated by the "chicken war" that pitted the US and South African poultry industries against each other during the course of negotiations for Agoa’s extension.

The US poultry industry lobbied hard to make the inclusion of SA as a beneficiary conditional on it providing better market access to US chicken exports.

The US has complained that SA imposed antidumping duties on imports of chicken from the US while at the same time favourable access was granted to the US market for a range of South African products without reciprocation.

Though SA argued that the antidumping duties were imposed lawfully under the World Trade Organisation (WTO) rules, in order to ensure the extension of Agoa and as a compromise, the parties are resolving the issue through the introduction of import quotas for US chicken.

SA does not have a reciprocal trade agreement or arrangement with the US. Though a range of South African exports enter the US through unilateral schemes like the Generalised System of Preferences and Agoa, there is no contractual agreement to guarantee and extend current market access opportunities nor are there frameworks to regulate important issues in bilateral economic relations, especially investment and intellectual property rights.

The US-Southern African Customs Union (Sacu) free trade agreement negotiations, which began in June 2003, had aimed to address this situation but reached a stalemate. The proposed 10-year extension of Agoa, if passed, will provide some breathing space and an opportunity for SA and its Sacu counterparts to seek to secure a contractual trade arrangement with the US. This is clearly time to reopen the stalled or failed US-Sacu free-trade negotiations.

The US sought to use the free trade agreement to, among others, eliminate barriers to its goods and services exports in the Sacu market; strengthen intellectual property rights; build alliances for the WTO negotiations; and to level the playing field to achieve something similar to the European Union (EU) that benefits from the trade, development and co-operation agreement they signed with SA.

The Sacu, on the other hand, aimed to use the potential free trade agreement as a means to achieve Agoa-plus liberalisation (by locking-in and possibly extending current market access); address nontariff barriers affecting their US-bound exports; spur regional integration in the Sacu; and to strengthen relations with the US as insurance against possible failure of the WTO’s Doha round of multilateral trade negotiations.

The talks were initially scheduled to conclude by December 2004 but it became clear by April 2006 that a free-trade agreement was unlikely to be reached before the expiry of the US’s 2002 Trade Promotion Authority in July 2007.

The US attributed the failure of the talks to, among other reasons, the absence of harmonised trade and investment policies within Sacu. But the Sacu blamed the US for being too inflexible with its comprehensive negotiating template which included many "new generation" trade issues such as investment — on which they were not keen to engage.

ULTIMATELY, the parties had to agree to lower the ambition from that of attaining a comprehensive trade agreement immediately to merely establishing a trade and investment co-operation agreement which would hopefully provide building blocks for a fully-fledged free trade agreement in the future.

The original motivations for the free trade agreement negotiations still stand. The US requires a similar or better market access regime to the Sacu, similar to the one the EU enjoys under the trade, development and co-operation agreement.

The Sacu, and SA in particular, needs assurance that current market access will not be lost and that any trade disagreements are dealt with within the framework of a contractual arrangement.

Lack of a contractual market access arrangement makes SA, as a preference receiver, particularly vulnerable in its negotiations with the US.

For instance, it would not have been possible for the US to seek chicken import quotas as a remedy against an antidumping measure. Any disagreements like these would have been resolved through the WTO rules and procedures.

The US seems to be particularly upset that while it continues to provide SA with generous unilateral market access to its market, it enjoys worse access conditions to the Sacu compared to the EU.

A clear indication that the US wishes to keep the pressure on SA following the renewal of Agoa is the inclusion of an "out-of-cycle review" of SA within 30 days of the coming into force of the renewal legislation.

While it is not yet clear whether the final version of the Agoa Extension and Enhancement Act of 2015 will contain such a provision, this proposal is a signal that SA may not be included in future US unilateral preference schemes as a beneficiary.

• Subban is a partner and Khumalo is a senior associate at Bowman Gilfillan.