Agoa exclusion could trigger legal action

South Africa will in all probability land up in court if the US raises duties on the import of automobiles and parts under section 232 of the Trade Expansion Act as it has recently done for steel and aluminium. America’s ongoing trade dispute with countries around the world, which has seen the country introduce a far more protectionist approach, is now threatening South Africa’s ongoing participation in the Africa Growth and Opportunity Act (Agoa). Trump’s administration is currently looking into applying section 232 to automobiles and auto part imports. It has already raised steel and aluminium tariffs by 25% and 10% as part of a bigger attempt to protect its own industries. Addressing the Exporters’ Club Western Cape last week, Minister of Trade and Industry, Rob Davies, said formal representations had been made. “We have made our point very strongly that should the US take us out of Agoa, we will face potential litigation from the poultry industry in South Africa due to the concession we made in 2015 to stay in Agoa,” said Davies. “The poultry industry was not happy about it and it must be said that the concession is linked to us being in Agoa. If a court rules that we are effectively out of Agoa because of these 232s then that will be it.” According to Davies section 232 duties will effectively suspend Agoa preferences. South Africa in 2015 had to fight to remain a part of Agoa and was forced to make a massive concession on poultry, improving market access for US bonein chicken cuts. While the poultry agreement, which was reached in Paris,  did not upend South Africa’s 15-year antidumping duties on American chicken imports, it did set a 65 000-ton-per-year quota for bone-in chicken cuts from the US. Despite concerns raised by local poultry producers over the impact this concession would have on the domestic industry, Davies at the time said the value of Agoa was still greater than the costs of making the accommodation in the poultry industry.