TRALAC - Trade Law Centre

AGOA deadline stretched to retain US leverage

Wednesday, 13 January 2016 Published: | LINDA ENSOR AND SIMON BARBER

Source: Business Day (South Africa)

The US government has adopted a "prudent, risk-averse" approach in extending rather than completely lifting the threatened suspension of SA’s agricultural products under the African Growth and Opportunity Act (Agoa), the Department of Trade and Industry’s director-general Lionel October says.

In terms of a proclamation issued by US President Barack Obama on Monday, SA has until March 15 to show it is implementing the agreements reached last week or it will face the loss of duty-free access for its agricultural products under Agoa.

Mr October said all the necessary health certificates and protocols had been issued by SA and there were no obstacles for US poultry, beef and pork entering the domestic market immediately as agreed last week.

"We have done everything we need to do on our side. The US wants to see that everything works and that the agreements are being implemented and does not want to let SA off the hook 100% by lifting the suspension, as then it will lose its leverage."

Mr October insisted the US approach did not indicate a lack of trust in SA’s commitment, nor was it heavy-handed and threatening. The US was acting in its own national interests and using the leverage the Agoa gave it. Agoa was not a bilateral free-trade agreement between two equals, but a unilateral grant of preferential access to the US market.

"They want to see the goods in our market before they take away their leverage," Mr October said.

His department was working with the Department of Agriculture, Forestry and Fisheries, the US embassy, domestic importers and US exporters, to facilitate the first shipments of US poultry under the agreed quota for US bone-in-chicken pieces free of antidumping duties, he said.

The chicken quota amounts to 65,000 tonnes annually.

The physical availability of US poultry in South African shops — after an absence of 15 years — was agreed as the key benchmark SA had to meet if Washington was not to reimpose normal duties on South African citrus, wine, macadamia nuts and other agricultural goods.

US trade office spokesman Trevor Kincaid said with the substantive issues having been resolved, "we are able to move to the final benchmark, testing the new system to make certain American poultry can be made available on store shelves in SA".

He added: "We have extended the effective date of any Agoa action to allow sufficient time for our products to enter SA and are making sure with stakeholders in both countries this happens quickly, so SA’s Agoa benefits can continue uninterrupted."

In November, Mr Obama gave SA until last Monday to remove remaining barriers to US chicken, beef and pork. SA missed the deadline as it could not agree with the US on how to deal with salmonella inspections of poultry and country of origin requirements for US beef. These and other remaining differences were bridged in urgent "extra-time" talks last week.

Asked how long it would take for shipments of US chicken to start reaching SA, Mike Brown, president of the US National Chicken Council, said it was "just a matter of the South African government issuing import certificates for South African importers and the US government’s food safety and inspection service issuing paperwork to US exporters.

"I would guess that we could be in the country within several weeks by plane and 30 or so days by boat."

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