SA drops the ball as Agoa hangs in the balance

South Africa’s
failure to meet the
October 15 deadline
for allowing the
resumption of United States
(US) poultry imports could
see the country losing out on
major trade benefits by as
early as January next year –
an estimated US$1.7 billion
worth of exports.
The president of the USA
Poultry and Egg Council,
Jim Sumner, commented:
“It’s my understanding that
the current African Growth
and Opportunity Act (Agoa)
benefits expire on December
31 so the out-of-cycle review
on SA’s inclusion will impact
benefits starting in January.”
He reiterated what the trade
and industry minister, Dr
Rob Davies, told FTW in an
interview earlier this month
– that SA’s Agoa inclusion
was now solely predicated on
whether US broiler parts were
allowed access into the SA
market.
“The ball is now in SA’s
court. The
Department
of
Agriculture,
Forestry and
Fisheries
(Daff) has not
been able to
satisfactorily
respond
to our
government’s requests for an
acceptable veterinary health
certificate that provides
assurances that our poultry
will be allowed entry without
unnecessary complications,
nor have they offered an
acceptable approach for
establishing a protocol
regarding Avian influenza,”
said Sumner.
Last week a US trade
representative spokesman,
Trevor Kincaid, warned in
an e-mailed
statement
to Business
Day that
Washington
had no choice
but to move
on with a
review of
South Africa’s
eligibility for
trade benefits under Agoa.
And, in a joint statement,
three US senators – Tom
Carper, Chris Coons and
Johnny Isakson – added
their voices, calling for South
Africa’s “inaction” to be
factored into the out-of-cycle
review of South Africa’s Agoa
eligibility.
“South Africa must take
the necessary steps to resolve
outstanding barriers to
US poultry immediately if
its Agoa benefits are to be
preserved. Hard-working
poultry farmers in our home
states and across the country
should not have to wait any
longer to participate in the
South African market,” the
senators said.
David Wolpert, CEO of
South Africa's Association
of Meat Importers and
Exporters (Amie), told FTW
that South Africa had missed
the October 15 deadline
simply because “we have been
dragging our feet”.
“We’ve had nearly five
months to get our
act together but
government
abdicated
too much
responsibility
by allowing
the local
poultry
industry to
negotiate on SA’s behalf,”
he said, pointing out that they
had adopted an aggressive
approach and attempted
to complicate issues by
introducing new hurdles for
the US to negotiate. “This
wasted a lot of valuable time,”
said Wolpert.
According to him, it
would be “tragic” for SA if it
suffered any consequences in
the form of Agoa penalties.
“We cannot anticipate what
the US trade representative
will recommend to congress.
We only hope SA can move
quickly and rectify the
situation for all our benefits.
This should be very feasible,”
said Wolpert.
Carol O’ Brien, executive
director of the American
Chamber of Commerce in
South Africa (AmCham), told
FTW that the loss of Agoa
eligibility would not only have
a direct economic impact but
would also send a negative
signal to investors.
INSERT & CAPTION
ball is now in
SA’s court.
– Jim Sumner
FAST FACTS
In 2014, US two-way
goods trade with sub-
Saharan Africa was
US$52.1 billion (under
2% of US global trade).
In 2014, the US
exported US$25.4 billion
in goods to sub-Saharan
Africa and imported
US$26.7 billion.
About one quarter of
this trade, or US $14.7
billion, was between the
United States and South
Africa.
In 2014, the total
value of South African
exports to the US under
Agoa was US$1.7 billion,
including automobiles,
ferromanganese,
industrial alcohol,
oranges, wine,
macadamia nuts,
mandarins, citrus juice,
pimentos, nuts and
raisins.
In 2014, the United
States imported US$55
million in fruits and
vegetables including
oranges, US$51 million
in wine and beer, and
US$48 million in tree
nuts like macadamias.
US government
estimates show that
the South African
agricultural sector has
the potential to expand
their exports to the US
by over US$175 million
in the near term.
In the citrus industry
alone in South Africa,
there are 85 000 jobs
that are a direct result
of Agoa, and in the
automotive industry
there are another 30 000
employed.
Source: American Chamber of
Commerce South Africa