Davies prepares SA for Agoa trade suspension

Jan 04 2016 14:18
Karabo Ngoepe

Pretoria - The possible suspension of South Africa from the African Growth and Opportunity Act (Agoa) will hugely affect the agricultural sector first, Trade and Industry Minister Rob Davies said on Monday.

“The first set of exclusions will be on agricultural products, but we have been told that it can be reversed if we reach an agreement," Davies told reporters in Pretoria.

The impacts would be on citrus, macadamia nuts, wine, canned food and avocados to mention a few, said Davies.

“We have been told that we will still be able to continue with negotiations even after the whistle is blown,” said Davies, who added that South Africa was playing in extra time.

He said there will be another meeting on 6 January, where there will be an indication if the whistle has been blown.

"It is our priority to conclude this process without any risk of uncertainty."

South Africa is at risk of losing its Agoa benefits over the health issues of US imports, with veterinarian authorities from both countries locked in negotiations.

READ: Agoa: SA is playing in extra time, says Davies

He said Agoa officials were told to seek solutions and answers in the negotiations.

The briefing followed South Africa missing its December 31 deadline to resolve a dispute on trade levies.

Agoa, renewed by US lawmakers in June, eliminates import levies on more than 7 000 products ranging from textiles to manufactured items and benefits 39 sub-Saharan African nations. Total two-way trade between South Africa and the US was about R217bn last year, according to Bloomberg.

Reports indicated that the US is on the verge of suspending South Africa from Agoa after it missed its December 31 deadline to resolve a dispute on trade levies.

US President Barack Obama is expected to make an announcement as early as Monday.

READ: US set to suspend Agoa and hit SA with trade tariffs

When the deadline expired at midnight on December 31, "outstanding issues" had not been resolved, Trevor Kincaid, spokesperson for the office of the US Trade Representative, told Business Day, which added that talks had continued late into New Year’s Eve.

The suspension will go into immediate effect once it has been announced, affecting all relevant goods not yet landed in the US, including those in transit, the Business Day explained.

"Both sides have made progress in the negotiations," Davies said on Monday. "The dti has submitted a beef proposal and is waiting for feedback. The salmonella issue is also still outstanding and we are awaiting feedback.

"We recognise we are in extra time," he said, adding that the dti will continue negotiations even if Obama blows the whistle on Agoa.

Bloomberg reported on December 31 that South Africa was confident of meeting its deadline to resolve a trade dispute that will allow it to retain duty-free access for farm export.

“We are totally committed to finding a resolution,” dti director-general Lionel October told Bloomberg at the time, while dti Minister Rob Davies said “yes and no” when asked by Business Day whether he thought the negotiations would fail.

In a November 6 letter to Congress, Obama said South Africa continued to impose several longstanding barriers to US trade and had been given 60 days to take remedial action or face suspension of some of its trade preferences under Agoa.

Veterinarians from the two countries are in daily contact to try to resolve outstanding issues relating to testing of US imports of poultry and pork for salmonella and other diseases, October said. They hope to issue final protocols in the next few days, he said on December 31.

“We have made the concessions on pork and beef imports,” he said. “We and the US Embassy are getting the vets to issue the final health and safety protocols." 

To remain beneficiaries of Agoa, countries are required to eliminate barriers to US trade and investment, operate a market-based economy, protect workers’ rights and implement economic policies to reduce poverty.

The trade programme has helped South Africa more than double its exports to the US since 2000.

Shipments under the agreement accounted for more than a fifth of the nation’s exports to the US last year, according to data compiled by the Trade Law Centre, based in Stellenbosch, near Cape Town.

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