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Letter from Washington: Knee-jerk communists kick at AGOA delusions

Letter from Washington: Knee-jerk communists kick at AGOA delusions
Simon Barber
Published date:
Thursday, 30 July 2015
Simon Barber

South African Trade and Industry Minister Rob Davies is a member of the central committee of the South African Communist Party (SACP), whose collective signature is on an article in the latest edition of African Communist.

In it, we read that the US’s African Growth and Opportunity Act (AGOA), which helped SA run a $2bn trade surplus with the US last year, is a tool devised by newly confident "monopoly capital" to force neo-liberal policies down the throats of SA’s working class. The "imperialist" US, say Davies and his friends — prime exhibits all in SA’s Jurassic Park of failed ideology — are "pushing SA very hard" by attaching "conditionalities" to Agoa’s 10-year renewal.

The SACP nanosaurs acknowledge that "the US is not necessarily keen to drop its Agoa relationship with SA". On that, at least, they are correct. Shakier, though, is the logic on which they base their conclusion.

Call it Sino-manic infantilism. Ending SA’s Agoa benefits would, they argue, "run the danger of ceding further market space in Africa to China". How, exactly? Agoa is a nonreciprocal programme. US exports enjoy no privileged access to SA but SA’s importers buy them anyway. To retaliate for loss of the Agoa gift, SA would have to impose de facto sanctions on US goods and services. All to get back at the US for denying SA trade privileges the nanosaurs have denounced as an "imperialist" plot.

But let’s leave the park and return to the real world where, at the behest of Congress, the office of the US trade representative is reviewing SA’s compliance with those pesky Agoa "conditionalities".

Four items, I am led to believe, top the US agenda. Three are agricultural, relating to chicken, beef and pork. The disputes concern nontariff phytosanitary barriers. On their face, they are hardly the stuff of ideology.

The other matter is the Private Security Industry Regulation Act Amendment Bill, which appears to threaten foreign firms with expropriation by forcing them to sell assets at fire-sale prices. The act awaits President Jacob Zuma’s signature.

The review, giving rise as it could to the loss of some or all of SA’s Agoa benefits, is meant to focus his attention on sending the bill back to Parliament for improvement.

The great US-SA chicken spat, theoretically settled in Paris in June, drags on.

Not one frozen Delaware or Georgia drumstick has since been shipped to SA, notwithstanding Davies’s agreement to let in 65,000 tonnes of the things annually at the normal tariff rate (as opposed to the rate imposed to punish alleged US dumping).

The Paris agreement is not self-implementing. Administrative t’s still have to be crossed. That the US understands. Not so the total ban SA has imposed on US chicken because of an outbreak of avian influenza in the Pacific northwest. The US wants SA to let in chicken from unaffected regions — as many other nations have done. It views SA’s refusal, thus far, as a case of SA not making the "continual progress" towards opening its markets as required by Agoa.

The beef beef is similar. The Americans thought SA agreed in Paris to join much of the rest of world in accepting that the risk of catching mad cow disease from US livestock is negligible. US pork was shut out of SA by a new health regulation in 2013. Although some cuts are now being allowed back in, the US thinks SA is being needlessly dilatory on both scores and will use the review to chivvy it along.

Disagreements of this nature are not driven entirely by science. The US is dropping hints that if SA plays nicely on chicken, beef and pork, it will look favourably on SA’s lamb, beef, avocado, litchis, persimmons, cooked ostrich and citrus.

The US department of agriculture thinks those items could earn SA $175m a year in the US market. It reckons SA’s bans are costing US farmers $120m a year in potential exports. To put things in perspective, worldwide US exports of the meats in question run to about $13.4bn.

The US trade representative has invited submissions covering all aspects of SA’s compliance with Agoa’s requirements. These include the threshold condition that beneficiaries not treat the exports of other developed countries more generously than those of the US. SA is in breach of that rule because of its free-trade agreement with the European Union.

Unless specifically raised by aggrieved parties, this issue, though hot earlier in the year, looks like being shelved for later. The US would prefer not to give the Jurassics the pleasure of seeing SA kicked, fully or partially, out of Agoa.

  • Simon Barber is a freelance journalist

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