Uncertainty and confusion continues to prevail around South Africa’s inclusion in the African Growth and Opportunity Act (Agoa).
Having missed the deadline of January 4 to remove barriers allowing US chicken into the country, South Africa has worked hard over the past few weeks to complete all the requirements for the out-of-cycle review launched by the US late last year to secure continued benefits under Agoa.
But American President Barack Obama is not taking any chances and on Monday called on South Africa to import chicken within the next 60 days or be suspended from Agoa.
“I have determined that South Africa is not meeting the requirements described in section 506A(a)(1) of the 1974 Act and that suspending the application of duty-free treatment to certain goods would be more effective in promoting compliance by South Africa with such requirements than terminating the designation of South Africa as a beneficiary sub-Saharan African country,” Obama said in a proclamation released on Monday. “Accordingly, I have decided to suspend the application of duty-free treatment for all Agoa-eligible goods in the agricultural sector from South Africa for purposes of section 506A of the 1974 Act, effective on March 15, 2016.”
According to DA shadow minister of trade, Geordin Hill-Lewis, the request is relatively simple – implement the agreement reached between the US and South Africa or be suspended.
“We have fulfilled all the requirements, and are currently in the process of signing all the documentation. However, the US is understandably not particularly trusting of us at the moment, and so this letter ensures that we actually do sign all of the paperwork, and actually allow US meat into the country in the next few weeks.”
John Purchase, CEO of Agbiz, said it was important to remember that Agoa was not a trade agreement but an act and therefore several legal and technical issues applied to it.
“We are not privy to the negotiations and what takes place behind closed doors, but it is clear that the Americans want to see actual imports take place. It is very difficult for business at present because this ongoing uncertainty does create a sense of unease.”
Terry Gale, chairman of the Exporters Club Western Cape, said it was essential for South Africa to meet this new deadline as the benefits of Agoa were huge for the country’s trade.
“The US is not giving us the benefit of the doubt anymore. They want us to put our money where our mouth is and commit to the agreements we make,” he said.
Whilst it is logistically possible to comply with the new deadline it has increased the pressure already on South Africa. It takes at least 30 days for goods from America to reach South Africa by sea.
A spokesman for the Department of Trade and Industry (dti) said officials were working on the matter and were confident they would meet the March 15 deadline.
