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Gaspard warns SA to heed Agoa-extension opposition from US farmers

20th February 2014

By: Terence Creamer

Creamer Media Editor

  

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US Ambassador Patrick Gaspard has urged the South African government to take heed of growing appeals from sections of American business for a levelling of the trade playing field ahead of upcoming deliberations on the extension of the Africa Growth and Opportunity Act (Agoa) beyond its September 2015 expiry date.

President Barack Obama had expressed support for the continuation of the nonreciprocal trade regime, which extends duty-free and quota-free access to the giant US market across a wide range of products from qualifying African countries. However, during his June 2013 visit to South Africa, Obama called for a “serious conversation about how we get a win-win formula”.

In 2012, South Africa exported $2.1-billion to the US under Agoa and is one of the few countries in Africa able to take advantage of the market access provided for manufactured products, including automobiles.

But in a frank address in Pretoria on Thursday, Gaspard, who was born in the Democratic Republic of Congo and describes himself as both an American and an African, cautioned that US businesses and lawmakers were asking why the scheme’s privileges should be sustained in the face of unnecessary barriers.

“It is a legitimate question. And one that is likely to be brought up when Agoa renewal is debated in Congress later this year.”

Particular concern about South Africa’s continue inclusion had been expressed by a group of 15 major US agricultural associations, representing 120 000 farmers and 8 000 agribusinesses.

In a letter drafted in November last year, these organisations expressed “strong opposition” to Agoa benefits being sustained in the face of South African barriers against US pork, beef and chicken exports. They wrote: “Agoa benefits are highly desirable and should not be taken for granted by countries that maintain restrictions on US food and agricultural products.”

Gaspard noted that the National Chicken Council alone represented 200 000 jobs. “They aren’t seeking concessions – just fair treatment. There is a lot at stake for both of us. I hope unnecessary and unscientific barriers against US imports will be addressed well ahead of the Agoa renewal debate.”

He also highlighted that Americans bought $250-million-worth of South African agricultural products last year, including $70-million worth of South African wine.

Gaspard, who took up his post five months ago, also expressed concern that his South African “counterparts” might not yet fully appreciate the impact that protection for farmed products could have on a “conversation that is taking place 8 000 miles away” in Washington DC. At times, he even felt there was a greater appreciation for Agoa on the factory floors of automotive plants in the Eastern Cape than was the case in the corridors of power.

“President Obama and the Secretary of State have been very clear about their support for Agoa renewal. However, it happens to be a democracy and they don’t get to make that call on their own – there will actually be a vote on that legislation in Congress,” he stressed. The lobbying efforts of US agribusiness would, thus, have an influence on the debate and, potentially, on the result.

“I don’t want to forecast the likely outcomes, but even before that correspondence was sent to Washington DC by the agribusiness sector, there were a lot of questions that have been asked about Agoa,” he said, including whether, given South Africa’s relative development, it should continue to be a beneficiary.

The South African government has strongly opposed suggestions that the country be “graduated” from the scheme, highlighting not only the relatively balanced nature of trade flow between the two countries, but also the importance of a common set of relationships to support regional integration, which the US supports. Excluding South Africa from Agoa would, in government’s view, reduce intra-African trade and regional integration.

Trade and Industry Minister Dr Rob Davies led a delegation to the US last September to highlight the importance of Agoa to South Africa, which is the continent’s largest non-oil-exporting beneficiary of the preferential market-access arrangement. The US accounts for 8.75% of the country’s total exports, which include motor vehicles and parts, nonferrous metals, iron and steel, chemicals, and other mining products.

Gaspard said that the leadership in Washington DC could be helped to appreciate that, below South Africa’s relatively strong economic position, it remained a developing country with many socioeconomic challenges. “[But] one should not underestimate the impact of the communication they are receiving from industry and this notion that a disadvantage exists for American interests.”

Edited by Creamer Media Reporter

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