SA’s AGOA future is in its own hands, says US official
Bilateral Trade by Sector: United States - South Africa
Value ('1000 dollars) / Year-to-date to March
As the office of the US Trade Representative wraps up a review of SA’s eligibility for preferential access to the US market, key members of Congress, including a long-time ally, have called for the inquiry to be broadened, citing "serious questions about SA’s openness to foreign investment" and its "commitment to an open, rules-based trading system".
Issues they want addressed include local content requirements imposed by recent changes in black empowerment codes; perceived threats to US agricultural exports from the EU-SADC Economic Partnership Agreement; and section 20 of the Private Security Industry Regulation Amendment Act, which could force foreign companies to divest from SA at fire sale prices.
They also voiced industry concerns about the draft Cybercrimes and Cybersecurity Bill.
SA’s "barriers" to US exports of poultry, pork and beef were not the only reason its eligibility for benefits under the African Growth and Opportunity Act (Agoa) should be questioned, Peter Tiberi and Charles Rangel, the Republican chairman and senior Democratic member of the House ways and means committee’s trade subcommittee, said in a letter last week to US trade representative Michael Froman.
"We are closely watching several proposals that may be indicative of a deteriorating investment climate," they wrote together with three colleagues.
"These include new localisation requirements, cybersecurity proposals that may impose undue burdens on foreign investors, and legislation under consideration that would force foreign-owned companies that provide security services to give up ownership stakes. Such policies raise serious questions about SA’s openness to foreign investment and its commitment to national treatment principles."
Mr Rangel was a driving force behind the original passage of Agoa and has been a champion of post-apartheid SA.
The Obama administration, at the urging of senators Christopher Coons and Johnny Isakson, has already issued a thinly veiled warning that unless SA lifts animal health and food safety related bans on US poultry, beef and pork, it may re-impose normal duties on SA’s leading exports including cars, ferromanganese and wine.
But on Wednesday, Trade and Industry Minister Rob Davies rejected the allegation that SA was blocking the import of pork and beef saying that significant progress had been made in addressing outstanding issues.
State veterinarians of both countries met in SA about two weeks ago and SA had already lifted restrictions on US beef imports that were based on the fact that its cattle were once infected with mad cow disease.
US officials had undertaken to fill out the necessary verification forms in this regard, he said.
Regarding pork, Mr Davies said restrictions had been lifted on quite a number of cuts, although there were still some outstanding ones to deal with.
"As far as I know, progress has been made," he said, cautioning that only the Department of Agriculture could give a definitive answer.
Mr Davies said he understood from discussions with Mr Froman that the only obstacle for SA in the out-of-cycle Agoa review was the issue of US meat imports.
As far as poultry imports were concerned, agreement had been reached on what would happen should there be an outbreak of avian flu in the US, and the Department of Trade and Industry was working on a system to administer the importation of the agreed 65,000 tonnes of US poultry imports allowed into SA free of antidumping duties.
The US Chamber of Commerce has urged the administration not to exclude SA from Agoa benefits.
In a submission to the US Trade Representative, it said "the role SA plays regionally as a trade and investment hub cannot be overlooked".
"It is also important to note that while SA may be considered a middle-income country, many of its citizens live below the poverty line and Agoa provides a lifeline to these people," it said.
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