Agoa crisis - broader dynamics at play

South Africa may have
averted an immediate crisis
and secured its participation
in the US African Growth
and Opportunity Act (Agoa),
but a battle is brewing and
the impact on trade could be
significant.
With the issues around
poultry finally resolved
after South Africa met all
the requirements for its
continued inclusion in Agoa
as set by American President
Barack Obama – albeit three
days late – government
officials are optimistic about
the future.
At a press conference last
week Minister of Trade and
Industry Dr Rob Davies
said there was a strong
relationship between South
Africa and the US built on
solid foundations.
He denied that the outof-
cycle review launched by
the American government
threatening exclusion from
Agoa – or South Africa’s
slow reaction to it – would
have any lasting effects.
“The conclusion of the
negotiations and us meeting
their requirements has in
our estimation brought an
end to any disputes with the
US. We think this episode
we have gone through is now
over and we want to build
on our relationship with
them,” said Davies.
Industry stakeholders,
analysts and commentators,
however, are not as
confident.
Peter Draper, managing
director of Tutwa
Consultants and an expert
in trade and investment
policy, told FTW the
proximate issue at hand had
been solved, but a far wider
range of US government and
business concerns were now
set to raise their heads.
“We have averted an
immediate crisis by
addressing the irritant in
the relationship. There have,
however, been far broader
dynamics at play than what
just meets the eye,” he said.
“It is good that a solution
has been found, but this is
not the end of the saga.”
Draper said far deeper
political issues were at the
core of the US out-of-cycle
review.
“There are bigger
dynamics at play here such
as the Private Security
Bill, draft IPR policy,
Promotion and Protection of
Investment Act, and more.
With the poultry issue solved
we can expect that attention
will now move to these
concerns.”
Geordin Hill-Lewis, DA
shadow minister for trade
and industry, said the entire
poultry issue around Agoa
that threatened a vast range
of agricultural and other
export goods could have
been wrapped up in July last
year.
“This has been a bruising,
damaging episode for
South Africa. We have done
significant damage to our
reputation in the negotiating
rooms of world trade and
to our relationship with the
USA. This will take years to
repair.”
He said concerns by the
US on the policy direction of
the SA government had not
yet been addressed.
“The Private Security
Bill, for example, would
immediately exclude us
from Agoa altogether, if it
was signed by the President.
So they will continue to
monitor us very closely.”
Draper said South Africa
was definitely not out of
the woods yet.
“One has to distinguish
between high politics and
low politics. For most
countries this is kept
separate. For example,
Washington may have
numerous trade disputes
with the European Union
(low politics) but it does
not undermine the broader
high politics involved,”
he said. “In the case of
South Africa it is starting
to blur. We are seeing
South African government
officials outright blaming
the US over global issues
such as Libya and Syria
while at the same time
forging closer and closer
trade ties with their Brics
partners. The low politics
is starting to feed into the
high politics environment
and it could have severe
consequences for trade
with the US.”
Davies, however,
maintains this is not the
case.
“It was not an issue that
was picked up in these
negotiations that we are
completing now. The
process was confined to the
issues around the poultry
and meats and we have met
the US requirements.”
CAPTION
Minister of Trade and Industry, Dr Rob Davies (right), pictured with the Minister of Health, Dr Aaron
Motsoaledi, as he briefs the media on the outcome of the Agoa negotiations with the United States.
Photo: GCIS