SA's Agoa inclusions hangs in the balance - again

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.