SA, US farmers in R14bn dispute
Battle to retain duty-free exports
SOUTH Africa is fighting to retain duty-free access for exports to the US worth as much as $1.7-billion (R14-billion) a year in a dispute that pits farmers in the two nations against each other.
The US is reviewing South Africa’s status as a full beneficiary of a preferential trade pact known as the African Growth and Opportunity Act (Agoa)‚ which eliminates import levies on more than 7 000 products ranging from textiles to manufactured items.
Agoa was renewed in June for another 10 years‚ benefiting 39 African countries.
At the heart of the dispute are US chicken and cattle farmers‚ who want the South African government to remove trade restrictions imposed to protect the local industry from a flood of cheaper imports.
While Trade and Industry Minister Rob Davies said on Tuesday that South Africa had done all it could to retain access to Agoa‚ the US government says there are still major unresolved issues.
“South Africa needs to take concrete steps towards eliminating barriers to US trade and investment‚ a key criterion to be eligible for Agoa trade benefits‚” Trevor Kincaid‚ a spokesman for the office of the US Trade Representative in Washington said on Wednesday.
No sooner had the two countries reached an agreement over US chicken imports to South Africa in June‚ than a new dispute emerged relating to import restrictions following an outbreak of avian flu in the US.
Veterinary experts from the two nations met last month to discuss health concerns over the shipment of chicken‚ beef and pork to South Africa.
The risk of South Africa losing its Agoa benefit is not “based so much on the realistic assessment of the value of the South Africa market‚ it’s more about politics in America”‚ Christopher Wood‚ a researcher in the economic diplomacy department at the South African Institute of International Affairs‚ said
South African Poultry Association chief executive Kevin Lovell, said on Wednesday he expected the US government and farming industry to “adopt a more equitable and reasonable approach”.
The US embassy in Pretoria said on September 16 that eliminating barriers on US poultry and beef exports would address concerns raised by the industry.
Agoa has enabled South Africa to more than double its exports to the US since 2000‚ with vehicles and agriculture products benefiting the most.
Shipments under Agoa accounted for more than onefifth of South Africa’s exports to the US last year‚ according to data compiled by the Tralac Trade Law Centre‚ based in Stellenbosch.
South Africa is accused of restricting US businesses with plans to cap foreign ownership of private-security companies at 49%. If the law is passed ADT‚ based in Boca Raton‚ Florida‚ will be required to relinquish control of its South African unit.
African countries that no longer qualify as beneficiaries under Agoa include the Democratic Republic of Congo‚ Gambia and South Sudan.
Swaziland lost its access in January because of an alleged lack of protection of workers’ rights‚ while Zimbabwe and Sudan are not eligible.
“South Africa is the key player under Agoa and neither side would want to see South Africa graduated out of the programme – the economic and political fallout would be big‚” Eckart Naumann‚ an independent economist and associate at the Trade Law Centre‚ said.
“There is a decent chance that South Africa may just scrape through.” — BDLiveBloomberg