US industry lashes out at proposed trade benefits

4 Aug 2000 - By Staff reporter

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'SA is too well-off to deserve preference', writes Alan Peat

THERE HAS been a blisteringly hot reaction from US industry to the trade benefits that SA is likely to receive under the recently promulgated Africa Growth and Opportunity Act (AGOA).
The basic response has been: SA is too well-off to deserve trade preference under an act designed to stimulate exports to the US from the underprivileged member states of the African community.
It might also be read to suggest that US manufacturers find certain SA products just too competitive to be comfortable with - especially if they gain the added price-competition element of duty-free entry to the US market under the generalised system of preferences (GSP) to be added to AGOA.
Industries ranging from steel producers to fruit growers have protested to the Washington-based office of the US trade representative who is currently employed in compiling the list of products which will be added to the AGOA list of GSP products.
Firms, trade associations and lobbyists have been knocking on the trade representative's door, appealing for him to limit the trade benefits in AGOA which SA stands to gain.
It's all part of the submission and appeal timetable attached to the pre-implementation procedure for AGOA.
SA companies or their sectoral umbrella bodies were given July 5 as the initial date for submission of their product details for inclusion under AGOA - with August 9 the final closing date.
The July date was also the first time for US voices to be raised as public comment in the AGOA.
And so far, almost all the SA industry groups which have been reported to have made submissions have immediately been met with counterfire from their US equivalents.
The SA Iron and Steel Institute (SAISI) has asked for removal of tariffs on what it describes as mostly value-added products believed not to be a threat to US manufacturers.
But these products - stainless steel - have already met with a violent reaction from the US, with dumping charges having been laid against SA exporters.
Following the latest AGOA submission from SAISA, the loudest protest was voiced by the Speciality Steel Industry body, which suggested that SA stainless steel was doing well enough without extra trade benefits. The body told the US trade representative that SA stainless production had managed singularly impressive growth without the benefit of GSP status, according to Business Day's Simon Barber in Washington.
Opposition has also been expressed to the extension of GSP for grades of silicon metal not already entering the US duty-free - where SA is the largest foreign supplier of this product to the US.
Even our fruit export industry has come in for flak. Peach and apricot farmers in the US sunshine belt of California are up-in-arms about GSP being allowed for SA canned fruit. A product, the American farmers argue, which is already highly-competitive in the US market - even while still facing import duties of between 15% and 30%.
Another of the targets for US objectors is likely to be SA shoes. The application by the SA Footwear and Leather Industries Association for inclusion in AGOA - and the removal of the present tariffs of 10% to 35% - has so far not been met with opposition voices.
But, said the African Coalition for Trade in Washington - which represents a number of southern African trade associations - the US shoe and leather industries are busy preparing their counter salvo.
Duty-free entry for SA beneficiated minerals has also met with one specific area of opposition. Among these exports is unwrought titanium steel, and the US-based Titanium Metals Corporation objects to the current 15% duty being removed.
But - given the statements from US industry that SA does not need the help of AGOA - the opposite standpoint has been taken by the combined voices of the SA apparel and fabric makers, supported by the SA Clothing and Textile Workers' Union.
They have submitted a deluge of petitions to the US trade representative - suggesting that SA should be declared eligible for the benefits.