Within Days, U.S. May Suspend Some AGOA Benefits For South Africa

Within Days, U.S. May Suspend Some AGOA Benefits For South Africa

South Africa could lose duty free status for its exports of luxury cars and citrus to the U.S. over disputes in U.S. poultry, beef and pork imports into South Africa, according to a report in IndependentOnline.

Due to repeatedly missing deadlines, South Africa risks losing some of its benefits under the African Growth and Opportunity Act (AGOA)  according to an announcement this week in the U.S.

This could result in the loss of thousands of jobs in key sectors, U.S. Ambassador to South Africa Patrick Gaspard told Independent Media.

U.S. poultry has been prevented from entering the South African market for 15 years, beef for 12 years, and pork for the past three years, IOL reports. Import of US. poultry, beef and pork products into South Africa is seen as a threat.

The two industries that have benefited the most under AGOA are South Africa’s automobile manufacturing and citrus industries, Gaspard said. “One would expect the impact to be in either of those worlds.”

Despite compromises made this year and a quota system put in place, U.S. poultry imports continue to be blocked by South Africa’s Department of Agriculture and Fisheries, IOL reports. The delay is due in part because South Africa hasn’t issued a needed health certificate and protocol on how to treat avian flu in the U.S.

A highly pathogenic form of avian flu broke out in about 20 U.S. states this year, BusinessDayLive reported. There had been no new outbreaks for more than 90 days.

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“There is a recommendation (from the U.S. Trade Representative) that has been advanced in Washington and which is making its way to President Obama,” Gaspard said. “As a consequence of South Africa missing the last three critical deadlines, in the next few days we can expect the White House to possibly suspend some benefits that South Africa enjoys under AGOA.”

AGOA enabled South African vehicle exports to grow from zero in 2000 to about $2 billion per year average, providing more than 30,000 jobs, IOL reports

In 2014 the U.S. imported $250 million worth of citrus products and $55 million in fruits and vegetables from South Africa. AGOA gave South African citrus a base in the U.S. market and allowed it to compete with Europe and Mexico. AGOA helped create 85,000 jobs in South Africa’s citrus industry.

Obama will be the ultimate decision maker and he will pay close attention to the concerns and guidance of the U.S. trade representative, Gaspard said. If it’s approved, the measure could take effect in January 2016.

“It is hard to stomach being called a bully when we are busy trying to negotiate even further market access for South African products such as avocados, lamb and parsimons,” Gaspard told IOL.

South Africa imports poultry, beef and pork to the tune of $2 billion from other areas such as the European Union, which does not grant South Africa duty free market access like the U.S. does. The U.S. considers this a double standard.

According to Gaspard, 138 countries accept U.S. poultry, 100 of them without any protocols, while 38 follow regionalization protocols. “It would be quite simple for South Africa to do the same,” Gaspard told IOL.

South African Trade Minister Rob Davies didn’t seems to share the U.S. ambassador’s sense of urgency. “We believe the negotiating process is on track, and we should expect US. imports of poultry, beef and pork by the end of the year,” Davies said.

Talks with the U.S. over sanitary and phyto-sanitary (SPS) requirements for the importation of U.S. poultry, beef and pork are concluded, Davies told South African MPs Tuesday, BusinessDayLive reported.

Mike Brown with the Washington,D.C.-based National Chicken Council said, “unfortunately the SPS issues were not yet resolved.”

South Africa and the U.S. can resolve these issues, Davies said told IOL. “The vets from South Africa and the U.S. will be meeting today to hammer out the outstanding issues.”

Ambassador Gaspard agreed officials on both sides are working night and day.

There’s no evidence to suggest that the U.S. is considering reducing South Africa’s benefits under AGOA, said Faizel Ismail, South Africa’s AGOA Special Envoy, in an interview with Independent Media.

Ismail said he’s in daily contact with the office of the U.S. Trade Representative. “We are working daily on finalising the last remaining technical issues that relate to poultry, and we are close to completing the process. I am 100 percent confident that by the end of the year we will have the technical process in place.”

Both sides insist they want to finalize a deal before it’s too late. “We are at the edge of the cliff, however,” Gaspard said.