South Africa’s last minute
concession on US poultry
imports to ensure its inclusion
in the recently renewed African
Growth and Opportunity
Act (Agoa) may have all been
in vain as the Americans
are now questioning the
Zuma administration’s trade
practices and its commitment
to market
principles.
Having
finally put
its poultry
feud with the
US to bed,
South Africa’s
future within
Agoa seemed
certain, but
the country
now faces a
very real risk of
being excluded
from the free trade agreement
with the world’s biggest market
after an unprecedented “outof-
cycle” review was launched
by the Americans earlier this
month.
The US House of
Representatives, which
recently passed the Agoa
Extension Bill, is
questioning South Africa’s
eligibility to Agoa. South
Africa is the only country
specifically named in the
text of the Bill, and the
concern it raises about
the national government’s
economic policies are
numerous, and valid, says
Western Cape Premier
Helen Zille. “And it does
not look good
for us.”
The text of
the Bill says
the ‘out-ofcycle-
review’
must consider
South Africa’s
“progress
towards
establishing”,
a marketbased
economy
that protects
private property rights and
minimises government
interference in the economy
through measures such
as price controls. The US
is also questioning South
Africa’s ability to provide
equal protection under the
law and the protection of
intellectual property. At
the same time the review
requests answers on what
systems South Africa has
to combat corruption and
bribery and how it will
eliminate human rights
violations.
“Clearly global markets
are concerned about South
Africa’s economic policies.
And so should we be,” said
Zille.
Addressing the Exporters'
Club Western Cape
last week, she said the
implications of losing Agoa
access were dire.
It is estimated R25 billion
in annual exports to America
would be at risk.
“The trajectory we are
on is of such a concern
that America is setting
conditions to its free trade
with South Africa. They
are raising questions that
should be worrying to
every South African.”
She said the review
launched on South Africa
was clearly questioning
government practices. “In
other words you cannot
have situations where
rural chieftains are above
the law or where there is a
biased national prosecuting
authority. You cannot have
a system where a president
gets away with more than
700 counts of corruption.”
Trade partners such as
the US were clearly nervous
over the local state of
affairs, she said.
Zille said the issues raised
by the US – to which the
South African government
had the opportunity to
respond – were serious food
for thought.
A public hearing is set
to take place on August 7
after which a decision will
be made.
Geordin Hill-Lewis, DA
member of parliament and
shadow minister of trade
and industry, commented:
“Agoa creates 175 000 jobs
in South Africa. The US is
still the largest economy
in the world and this
agreement opens up this
market to South Africa
tariff free. The risk of not
being granted eligibility is
very real.”
The Department of
Trade and Industry
(dti) has not officially
commented on the review
but Minister Rob Davies
is reported to have said
the poultry deal would be
nullified should President
Obama rule against South
Africa.
Hill-Lewis said the truth
was that over the course of
two years South Africa had
proven to be an extremely
poor negotiating partner
with the US around Agoa
and the poultry issues.
“It may be too little too
late,” he said. “We have
behaved in such a way
that one would swear
there was no obvious and
massive national interest
in maintaining our
preferential access to the
world’s biggest economy.”
CAPTION
Western Cape
premier Helen Zille.
