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Decision on AGOA access looms for SA

Decision on AGOA access looms for SA
Johannesburg, South Africa
Published date:
Tuesday, 06 October 2015
Author:
Sechaba Nkosi

D-Day looms for South Africa’s level of access to the US African Growth Opportunity Act (Agoa) and the benefits it provides as US authorities are due to make a decision in about two weeks.

Trade and Industry Minister Rob Davies told Business Report on Friday that negotiations between the country and its US counterparts were continuing to ensure that the country’s conditional access to Agoa was lifted and full benefits were restored.

rob davies 640px

Rob Davies

 

The US government has been complaining that South Africa continually offers assurances that its market is open, but then new obstacles always seem to arise when old ones are removed.

The US has warned that South Africa’s Agoa benefits remain at risk.

Davies said South Africa was still on an out-of-cycle review pending the finalisation of the negotiations on meat quotas, but the country had done all it could to assure the US authorities that the matter would be settled soon.

“We are eligible for Agoa benefits and in two weeks we will be able to access those benefits. But what they did say (is) we are going to be subject to an out-of-cycle review,” Davies said. “The ball is entirely in the court of the US side, that is their exercise, they are the ones who are going to decide on the outcome of the out-of-cycle review. We will be informed in due course about what the outcome is.”

Out-of-cycle review

The out-of-cycle reviews are invoked under Agoa to monitor and review the eligibility of beneficiary countries.

According to the subsection, a review can be initiated at any time to determine whether a beneficiary sub-Saharan African country still meets the eligibility criteria set.

The eligibility requirements state that countries should make progress towards establishing, among other things, an effective legal dispensation, an effective labour law system and eliminate barriers to US trade and investment.

South Africa missed the end of September deadline when the US authorities demanded more concessions particularly on the meat imports and the Private Security Regulation Amendments Bill.

Since the treaty was introduced in 2000, South Africa has exported significant quantities of manufactured goods to the US. These exports included about 60 000 vehicles a year and the treaty had helped to turn a trade deficit with the US into a trade surplus of about R12 billion last year.

However, Davies said a breakthrough on the outstanding issues was still in sight as the teams from both countries were thrashing out the finer details of the new dispensation.

“From the conversations and interactions that we have been having with our counterparts in the US, we are of the view and understanding that the issues are the ones in the area of meats, which is poultry, pork and beef. And we had a very important meeting of veterinary officials and full teams in September where there was an understanding, particularly on the poultry, the avian flu issue, the remedies that would (be) put in place if there was an outbreak in some parts of the US. There was an understanding and an agreement that was reached between the two sides,” Davies said.

Agoa benefits expired last Wednesday and the US Congress earlier this year extended it for ten years.

However, South Africa was singled out, which makes its continued participation conditional on it giving greater access to its market for US poultry, beef and pork imports.

chicken farming 640px

Security bill

The US administration, legislators and security industry also demanded that South Africa amend proposed legislation that would require foreign security companies to sell off at least 51 percent of their ownership to South Africans.

“The people have raised the security bill from time to time. The bill is sitting with the President (Jacob Zuma), it has not been signed into law and any number of issues raised in the process there is that the review can still be done. Anybody can make any submission on the issues that came up there, but the real issues at stake are the ones in the meats, and that there is very significant progress on those,” Davies said.

South Africa has promised concessions on most of these issues, particularly in January when it agreed to a quota of 65 000 tons of US poultry imports a year. But US senators believe the country was putting up new barriers to replace old ones.

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