Food exporters call for preferential trade agreement
South African business
can ill afford the added
pressure the saga
surrounding the country’s
inclusion in the African
Growth and Opportunity
Act (Agoa) has brought in
recent weeks.
With missed deadlines,
late submissions and
11th hour deals, real
questions now exist over
South Africa’s continued
involvement in
Agoa, with the
Americans
demonstrating their lack
of trust in the country
by suspending all
agricultural benefits
until such time as
poultry under the
agreements reached
actually enters
South Africa.
A deadline of
March 15 has
been set by
President Barack
Obama for this to
happen.
“The American market
is one of huge importance
and this entire situation
has undoubtedly strained
relations with the US,”
said Terry Gale, chairman
of the Exporters’ Club
Western Cape. “We cannot
blame them for not really
trusting that we will do
what we said we would.
At the same time it has
placed further pressure on
business which is already
operating in a strained
environment.”
While the Department
of Trade and Industry last
week repeatedly said South
Africa would not miss the
March 15 deadline and
would see all Agoa
benefits returned,
there are some serious
misgivings about the
approach taken.
John Purchase,
CEO of Agbiz, which
represents about
80 companies and
associations involved in
various agro-food value
chains, including fruit,
nuts, wine, poultry, red
meat and grains, said the
review of South Africa
and its continued Agoa
involvement had resulted
in major uncertainty in the
past few weeks.
“This kind of uncertainty
does not bode well for
business and it causes
unpredictability. How
does one plan export
programmes and invest in
new orchards, plantations
and processing factories
over ten, 20-year time
horizons when there is
no certainty on the trade
status with the US?”
Purchase said there was
no denying the importance
of the American market,
especially for agricultural
products such as fruit,
wine and nuts.
“The US is a market that
we want to access and it
has huge potential. When it
comes to fruits such as avos
and litchis we are seeing
great interest and the
growth of these products
in this market has been
tremendous, but we cannot
operate in such uncertain
environments.”
He said the organisation
was of the opinion that it
was necessary for South
Africa to sign a preferential
trade agreement with the
US.
“Agoa is not a trade
agreement and while it has
value and benefits for our
trade it also means we are
subject to annual reviews
and out-of-cycle reviews
such as we have seen.”
Purchase told FTW
that developing longerterm
arrangements that
had more certainty would
ultimately create more
predictability for industry,
allowing them to invest
and plan far better.
INSERT & CAPTION
How does one plan
export programmes
and invest in new
orchards when there
is no certainty on the
trade status with the
US?
– John Purchase
