- African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/New hurdles block AGOA deal

New hurdles block AGOA deal

New hurdles block AGOA deal
Minister Rob Davies
Published date:
Tuesday, 05 January 2016
Banele Ginindza

The deadline for resolving disputes with the US passed yesterday, leaving South Africa at risk of losing its benefits under the Africa Growth and Opportunity Act (Agoa) that translates into billions of rand in exports and supports thousands of jobs.

At the same time, issues related to bacterial disease Salmonella associated with poultry and the quarantine of non-US originating beef arose as new hurdles to be cleared.

Department of Trade and Industry Minister Rob Davies, Agriculture Minister Senzeni Zokwana and Health Minister Aaron Motsoaledi, said they were hoping to find a solution to issues related to US meat imports despite the deadline having passed yesterday.

Negotiations were still ongoing and there was an expectation that in turn South African exports to the US would be allowed to continue with the preferential treatment.

According to Davies, ballpark figures bandied about were that R25 billion out of R70bn of South Africa’s annual exports to the US had received Agoa preferential treatment and that the trade scheme sustained more than 60 000 jobs in agriculture and other industries.

US threat

US President Barack Obama had in November threatened to halt the import of certain South African agricultural products from the Agoa deal within 60 days unless the dispute over US meat imports was resolved.

Agoa is a trade pact between the US and 39 African countries that provides duty-free access to the US market across 7 000 product tariff lines including apparel and footwear, wine, certain motor vehicle components, a variety of agricultural products, chemicals and steel. Davies said the talks had gone into “extra time” and were “awaiting the final whistle”.

South African government officials have been engaged with their US counterparts during the festive season to finalise all the outstanding technical issues to allow for safe imports of poultry, pork and beef products from the US as a requirement for South Africa’s continued participation in Agoa agriculture trade benefits.

“Our objective is to continue to stay in Agoa for the benefit of this country and for the benefit of the bilateral economic relationship. At the same time we do this in such a way that we do not subject either our animals or our people to any unacceptable risk,” Davies said.

“South Africa believes that with some flexibility from both sides the final touches to the agreement on which 95 percent of the work has been done can be completed with some extra-time,” he added.

Outstanding issues, expected to be at the tail end of discussions slated for Wednesday, include beef imported by the US from neighbouring countries for which South Africa is awaiting a response on if the US agrees that such herds be quarantined in the US for 90 days, as well as procedures to be followed in the event Salmonella is detected in poultry imports from the US.

In September last year, following the expiry of the first Agoa agreement after 15 years, the extension of Agoa was made conditional on South Africa agreeing to imports of certain meat products from the US and South Africa had to declare bovine spongiform catalyties or mad cow disease as no longer applicable to beef imported from the US.

South Africa has already issued an avian influenza certificate and put in place rules for administration of the tariff quota which it gazetted on December 18.

However, concerns have been raised about the exclusion of agricultural products from Agoa as part ransom for full agreement on all issues.

Agreement pending

Davies said South Africa’s automotive exports to the US would not be affected by any halt to Agoa benefits that the country receives.

The exclusions would cover wine, macadamia nuts, citrus, avocado and other products that would be suspended, pending the finalisation of agreements between the two countries.

“The coming exclusion of South Africa’s agricultural exports from Agoa benefits is bleak news for our economy, and is the worst possible way to begin 2016,” the DA said in a statement issued after the media conference.

“Since the negotiations began South Africa has made significant progress on opening its market for the three US meats. This includes an agreement on a quota for bone-in-chicken pieces and a poultry trade protocol on avian flu,” the Department of Trade and Industry said in a statement.

However, SA Poultry Association boss Kevin Lovell said the talks were from a position of weakness because Agoa was a gift.”We are not negotiating as equal partners,” he said.

The local poultry industry last year had to concede to 65 000 tons of poultry being imported into the country as part of the US demands.


Read related news articles

South Africa walks a tightrope on US relations

South Africa has been conducting a high-wire act in its relations with the United States (US). It is maintaining friendships with Washington’s enemies like Russia, Iran and China while trying to avoid disrupting its economic relations with America. Tensions came closer than ever to breaking point this month as the US House of Representatives’ Committee on Foreign Affairs passed the US-South Africa Bilateral Relations...

28 March 2024

Remarks by Deputy Treasury Secretary Adeyemo on the US-South Africa economic relationship

As Prepared for Delivery in Johannesburg, South Africa Thank you for the warm welcome. I want to express my gratitude to Consul General Spera and the American Chamber of Commerce for hosting me. I am honored to be joined today by South African Entrepreneurs that are building companies to unlock the economic potential of their country.  I owe my own presence here today to the inspiration I drew from South Africa. In the middle of the...

13 March 2024

South African president Ramaphosa meets with US congressional delegation

South African President Cyril Ramaphosa today, 21 February 2024, received for a visit from a bipartisan congressional delegation from the United States of America, in Tuynhuys, Cape Town. The delegation is visiting South Africa at the invitation of the Aspen Institute. The President and the US congressional delegation discussed the importance of the relationship between South Africa and the US, which manifests in strong economic,...

21 February 2024

US congress receives Bill to review South Africa relations

A bill has been submitted to the United States congress calling for a full review of the country’s bilateral relationship with South Africa following the International Court of Justice ruling that found it plausible that Israel has committed acts of genocide against Gaza. The bipartisan bill which was introduced by US Republican congressman John James and Democratic Party congressman Jared Moskowitz this week could threaten South...

09 February 2024

Fitch research unit expects better AGOA deal for South Africa

Fitch’s research arm, BMI, believes SA has done enough to get improved trade terms under the African Growth & Opportunity Act (Agoa), which it expects to be extended and modified before its expiry in September 2025. But it warns that the deal might be stillborn if Donald Trump is elected US president. The research think-tank said in a note it assigns a 65% probability that Agoa will not only be renewed but modified to the benefit of...

09 January 2024

South Africa: BLSA CEO calls for more companies to leverage AGOA opportunities

Many more South African companies could benefit from the African Growth and Opportunity Act (AGOA), which gives eligible countries access to US markets free of tariff barriers, business organisation BusinessLeadership South Africa (BLSA) CEO Busi Mavuso writes in her weekly newsletter. Apart from mainstream formal sector businesses, there are opportunities to enable more entrepreneurs, including women-led...

20 November 2023

US ambassador: AGOA is an opportunity to deepen ties between the US and South Africa

President Joe Biden last December at the US-Africa Leaders Summit affirmed that the US will elevate its relationship with Africa. The future is Africa. One example is its youthful population: the median age on the continent is 19. By 2050, one in four people in the world will be in Africa. The US wants them to be healthy and wealthy. What happens in Africa will affect the rest of the globe — and we want to work together to ensure it is...

09 November 2023

US Senator Chris Coons proposes AGOA extension by 16 years, immediate review of SA’s AGOA eligibility

Powerful US Democratic Party Senator Chris Coons is circulating a discussion draft of a Bill to renew the African Growth and Opportunity Act (Agoa) for 16 years that would also require an immediate “out-of-cycle” review of South Africa’s eligibility for Agoa. That could lead to South Africa being removed next year from the programme, which has provided considerable benefits to SA exporters to the US of cars, fruits and wine, in...

07 November 2023

AGOA benefits extend beyond trade [incl. VIDEO of Friday's opening session]

Economies in Sub-Saharan countries stand to benefit far more from the African Growth and Opportunity Act (AGOA) than notable trade statistics, says President Cyril Ramaphosa. “AGOA enhances the diversification of African economies, enabling them to export value-added products. By enabling African countries to have preferential access to the US market, this opportunity incentivises African countries to develop and export value-added goods...

06 November 2023

South Africa pins its hopes on an early 2024 US Congress renewal of AGOA

South Africa’s government is hoping that the process to renew the African Growth and Opportunity Act (Agoa) by the US Congress will be concluded by early 2024, ensuring that more than 20 African countries continue to have duty-free access to the world’s largest economy.   This is the first time that the South African government has given a timeline for when it hopes the US Congress might extend Agoa, which has been renewed twice...

05 November 2023

SA trade minister Patel expresses confidence at media briefing about South Africa’s continued inclusion in AGOA

Ahead of South Africa hosting the US-AfricaTrade and Economic Cooperation Forum – also called the AGOA Forum – from November 2 to 4, Trade, Industry and Competition Minister Ebrahim Patel on October 26 briefed the media on the state of readiness for the forum, expressing confidence that the South African government’s relations with the US were strong. Various South African stakeholders have been motivating for...

26 October 2023

You are here: Home/News/Article/New hurdles block AGOA deal