TRALAC - Trade Law Centre

AGOA reaction: 'Common sense prevailed'

Thursday, 07 January 2016 Published: | Carin Smith

Source: Fin24 (South Africa)

The Association of Meat Importers and Exporters of SA (AMIE) is thrilled about the news that SA has reached an agreement with the US which paving the way for the country to remain part of the Agoa trade programme.

Minister of Trade and Industry Rob Davies announced on Thursday that negotiations between SA and the US over health issues related to meat imports were concluded on Wednesday, which should ensure the country remains a part of the US African Growth and Opportunity Act (Agoa).

Agoa enabled duty free, trade access preferences for SA's agricultural products.

"We congratulate the negotiators on both sides of the Atlantic. It appears that common sense has prevailed," AMIE CEO David Wolpert told Fin24 shortly after the announcement.

"We do not yet have any detail relating to the salmonella agreement, but trust that this will be sensible and practical. We look forward to the resumption of trade in bone-in chicken products with the US, and trust that the quota allocation processes will operate effectively."

The deal means that the South African market is now open for 65 000 tonnes of US poultry imports.

John Purchase, CEO of Agbiz, which represents about 80 companies and associations involved in various agro-food value chains, said the organisation welcomes the conclusion of the salmonella testing protocal which now paves the way for SA to remain in Agoa.

For Michael Jordaan, chair of Wines of South Africa (Wosa) told Fin24 that the Agoa deal is great news.

"Africa needs less aid, which paints us as a charity case and more free trade, which allows us to compete on a level playing field. Ideally we would like to trade freely within Africa, but also with Europe and China," said Jordaan.   

The SA wine industry - through Wosa - has identified the US as a priority growth area given that it is the largest wine market in the world and that SA's market share is significantly lower than in Europe, SA's traditional export region.

"With the rand breaching R16 to the dollar this is an opportunity for all export oriented industries to consider how they can grow in the US market. SA wine is of exceptional quality and is poised to make an impact in the global premium wine category," concluded Jordaan.

Rico Basson, CEO of VinPro, agrees with Jordaan about the critical importance of the US wine market for the SA wine industry.

"The US, together with China and the African continent, have been identified as priority markets for SA wine," said Basson. "That is why trade agreements like Agoa is very important for the wine industry."

The Western Cape trade promotion agency Wesgro also welcomed the retention of Agoa benefits for Western Cape farm products and hopes that the strong growth in agricultural exports out of the Western Cape made possible under Agoa will continue.

The US is the Western Cape’s second largest export market and a key growth market for local agricultural products. The Western Cape’s exports to the US under Agoa increased by an annual average growth rate of 16% between 2001 and 2014.

Meanwhile South African Poultry Association CEO Kevin Lovell told Fin24 that with its decision the government has put animal and human health at risk.

"The US are unwilling to comply with SA's requirements and are in contravention of world trade agreements," he said.

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