Agoa deal not negotiable
the South African economy, so it is important to us, that Agoa be renewed and that South Africa remain eligible to benefit from the generous terms of this agreement.
One of the conditions of eligibility is a pledge to work towards eliminating barriers to trade and investment with the UA.
Of issue here is our recent institution of tariff barriers to protect our chicken industry.
We have a number of big chicken producers in our area and so the problem lies very close to home, and there are several issues at play here.
Firstly, there is the matter of free trade. We are part of a global village and competition is tough. As the saying goes, if we want to run with the big dogs in the long grass, we had better be prepared.
Competing requires, at the very least, the application of exceptional human capital at market-related prices, and the employment of current technology.
The harsh free-market view would be that our producers should be competitive, or we shouldn’t try to produce.
Following this logic, the capital employed in that industry would be better employed somewhere else.
But what if the playing fields were not level? What if producers, in the source market that is flooding our market (not the US), are highly subsidised by their state?
Agricultural subsidies are not uncommon, and are currently not considered an unfair trade practice, but the reality is that they make it almost impossible for local producers to defend their market share.
The introduction of tariff protection is a highly contentious issue because, and as has been pointed out by the importers, imposing higher tariffs may protect the local producers, but it will also drive up costs for consumers.
Moreover, the larger political ramifications to the introduction of tariff protection are massively problematic, as we have seen in relation to the renewal of Agoa.
We do need to protect our chicken industry from unfair competition, but we also need to keep Agoa in place. Depending on us to do so are 65 000 South Africans.