‘SA-US agreement on trade deal is close’

Obama gives 60-day warning on export tariffs

SOUTH Africa and the US are “tantalisingly close” to resolving differences that resulted in President Barack Obama threatening to cut agricultural products from this country out of an agreement giving certain products tariff-free status.

This was the view of Trade and Industry minister Rob Davies yesterday after Obama gave a 60- day warning for South Africa to meet its commitments to allow importation of US poultry, beef and chicken or face having to pay tariffs on its exports to that country of citrus products, macadamia nuts and wine.

Davies said South Africa believed it had met the requirements, and communicated this to the US authorities last week, asking for a response.

This had not been forthcoming until Obama’s announcement on Thursday.

The only outstanding matters were the details of an exit clause relating to the protocol on avian flu, which would govern imports of US chicken and measures relating to salmonella.

These details were being thrashed out between the veterinary authorities of the two countries, and was a technical process in which he couldn’t interfere, Davies said, adding while some on the US side appeared to believe the South African vets had been instructed to play “rope a dope” in putting up spurious reasons for blocking the US meat products, the opposite was the case.

He and Agriculture Minister Senzeni Zokwana had been facilitating talks between the two sides in an effort to implement the quota agreement struck on imports of US chicken in Paris earlier this year.

Losing the benefits granted certain countries under the African Growth and Opportunities Act (Agoa) would potentially cost citrus, macadamia nut and wine farmers a lucrative market, as prices of these goods would become less competitive relative to Latin American producers, in particular.

South Africa has been subjected to a review of its Agoa benefits after the act was renewed by the US congress for another 10 years as senators from poultry-producing states demanded it lift anti-dumping duties it imposed in 2000 on certain US chicken portions.

The agreement in Paris allowed for a quota of 65 000 tons of chicken wings and drumsticks to be sold in South Africa, but this was subject to agreement on the food safety requirements of local authorities.

Davies said reaching an agreement on these had taken longer than expected.

In his letter to Congress Obama said he believed South Africa was “not making continual progress toward the elimination of barriers to US trade and investment, as required by section 104 of Agoa”.

Former South African ambassador to the World Trade Organisation Faizel Ismail said the US president could have chosen instead to accept that this country would resolve the outstanding issues.

But the process remained “on track”.

Davies said he was confident it would be concluded well before the 60 days were up.

MEC for Economic Opportunities Alan Winde said he had written to Davies and Zokwana appealing to them to resolve the matter.

“This is a major threat to export growth and to jobs in the affected industries,” Winde said.

“Last year, under the Agoa programme, the Western Cape exported R1.47 billion to the US.

“Of this, wine and citrus exports amounted to R719 million.

“In addition, the wine industry employs just over 289 000 people in the country and 167 000 in the Western Cape alone. If we do not find an urgent resolution, these jobs will be on the line.”