TRALAC - Trade Law Centre

South Africa confident it will meet 60-day ultimatum

Friday, 06 November 2015 Published: | Carin Smith

Source: Fin24 (South Africa)

The South African government is confident that it would be able to resolve all outstanding issues and avoid the suspension on its duty-free farm trade status with the US, the Department of Trade and Industry said on Friday.

This was in reaction to the news that, in a letter dated November 5 2015, US President Barack Obama warned South Africa that, if the negotiations regarding certain outstanding issues relating to poultry imports were not resolved by December 31, the US would suspend SA’s duty-free treatment of its agricultural goods into the US.

According to industry players, this in effect means SA has only about 60 days to avoid a profoundly negative impact on its economy if the suspension kicked in.

In its defence, the dti said that removing South Africa from the African Growth and Opportunity Act (AGOA) would substantially diminish the law's significance for sub-Sahara Africa and the United States. SA meets all the eligibility criteria to remain a beneficiary of AGOA for the next 10 years, according to the dti.

"AGOA has contributed significantly towards building a mutually beneficial partnership between the US and SA," the dti said. "South Africa is a vital part of the regional integration and development process underway in Africa," the dti said.

The main issues to be resolved are the opening of the South African market to US exports of the three meats: poultry, beef and pork. The dti emphasised that there are significant opportunities for both the US and SA to increase their trade in agriculture.

The dti said on Friday that South Africa’s negotiators have been well aware of the US' authority to suspend a country’s trade benefits in terms of the AGOA Extension and Enhancement Act. This can be done where the US believes that a beneficiary of AGOA is “not making continual progress toward the elimination of barriers to US trade and investment”.

The department, on the other hand, claimed it has been making continual progress during the past few months to implement an agreement reached in Paris in June this year.

At the Paris meeting SA agreed to open the South African market to the US for 65 000 tonnes of bone-in chicken pieces through a rebate facility. It expects the process of creating this quota to be concluded well before December 31 2015.

In the case of poultry, the US wants South Africa to keep its market open to US poultry from those US states that are not affected during an outbreak of bird flu, for instance, the dti said.

South Africa believes that it is on track to meet the December 31 deadline to resume imports of US poultry into South Africa.

As for beef, cabinet approved the lifting of a ban on boned beef from several countries which had Bovine Spongiform Encephalopathy (BSE), including the US, in June. The dti said SA is open to discussing this issue "on an expedited basis".

On pork, the dti said SA vets have made significant progress and have been able to approve a list of pork cuts. South Africa remains ready to address any other concerns of the US.

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