South Africa’s access to some of the duty-free trade benefits of the African Growth and Opportunity Act (Agoa) hangs in the balance as the nation enters “extra time” in meeting the demands of the US for the elimination of barriers to US poultry, beef and pork trade.
With South Africa’s deadline to concede to the US’s Agoa demands having passed without resolution last week, Trade and Industry Minister Dr Rob Davies on Monday said the “whistle has not been blown” yet and there was hope of the US showing leniency in not implementing the promised partial restrictions on the pact meant to bolster trade with emerging economies.
On November 5, US President Barack Obama said duty-free benefits on all Agoa-eligible agricultural goods would be suspended should South Africa fail to implement, by December 31, the agreement reached in Paris in June 2015 to ease restrictions on the three meats and improve market access for the US.
South Africa also had until March 1 to prove to the Western powerhouse that it complied fully with the Agoa eligibility criteria or the benefits would be further limited, held in suspension with an extension into other Agoa-agreed products, or terminated altogether.
However, Davies said that regardless of the US’s reversible decision – which had yet to be communicated – engagement would continue to resolve the long-standing impasse around sanitary and phytosanitary matters, including protocols around salmonella, such as tolerance levels and protection procedures, and issues over imported beef that initially originated from outside the US, as South Africa refused to concede to anything that could risk the health of its citizens.
Updating media at a briefing in Pretoria, he explained that discernable progress had been made over the past two months, but a balance needed to be struck between opening up trade and mitigating animal health protocols to avoid any risk and uncertainty.
South Africa had made “significant progress” on opening its market for the three US meats, with an agreement on a quota for bone-in-chicken pieces and a poultry trade protocol on Avian Flu having been reached, while pork health certificate negotiations were concluded and just required signatures by both sides.
Further, much work had been done to resolve the salmonella concerns, with some technical issues still to be finalised, as well as the beef origins concerns, with a few issues that could be finalised quickly.
“South Africa believes that, with some flexibility from both sides, the final touches to the agreement, on which 95% of the work has been done, can be completed with some extra time,” he added.
Should the US implement partial Agoa restrictions, agricultural products, such as macadamia nuts, canned fruit, wine and avocados, besides others, would be the first to be excluded from the current duty-free treatment enjoyed from the US.
Around R35-billion of the R75-billion in exports to the US was a result of the nonreciprocal trade agreement, with some 62 000 jobs in industries benefiting from Agoa.
The loss of benefits had been widely estimated to potentially cost South Africa more than $7-million across several of the affected sectors, with the suspension affecting around R2.4-billion of yearly agricultural exports.
South Africa exports about $130-million of agricultural products to the US yearly, with oranges ($41.1-million), wine ($33.1-million), macadamia nuts ($31.6-million), mandarins ($9.5-million) and pimientos ($5.2-million) making up the top five agricultural exports.