Obama Gives South Africa An AGOA Ultimatum: 60 Days Or Suspension

Obama Gives South Africa An AGOA Ultimatum: 60 Days Or Suspension

U.S. President Barack Obama has given South Africa 60 days to remove barriers to U.S. products or face sanctions in a long-running battle over chicken exports, BBC reports.

In a letter to Congress, Obama said he was taking the step because South Africa “continued to impose barriers to U.S. trade.”

Eliminating barriers to U.S. trade and investment is one of the criteria for membership of the African Growth and Opportunity Act (AGOA), which was renewed earlier this year. AGOA gives duty-free access to goods from sub-Saharan African countries including cars, citrus, meat, crude oil and clothing.

U.S. chicken and cattle farmers want South Africa’s government to remove trade restrictions imposed in 2000 to protect South African farmers from cheaper imports, according to IndependentOnline.

When the U.S. Congress renewed AGOA in June for 10 years, it gave the U.S. Trade Representative and the White House the option — which they are now preparing to exercise — of suspending non-compliant countries’ benefits on a product-by-product basis, BusinessDayLive reported. Previously, countries were either in or out.

Congress ordered the an “out-of-cycle review” to determine whether South Africa — by far the largest user of AGOA benefits — was eligible to continue enjoying them.

South Africa has been able to export its meat to the U.S. duty free. In Paris in July, the two countries agreed U.S. exporters could sell South Africa 65,000 tonnes a year of the chicken parts before anti-dumping tariffs kicked in.

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Obama said Thursday that South Africa had until Jan. 4 to satisfy him that it’s complying with the eligibility requirements to enjoy duty free access for its agricultural products under AGOA, BusinessDayLive reported. If not, the U.S. will impose normal tariffs on South African agricultural products.

“I am taking this step because South Africa continues to impose several longstanding barriers to U.S. trade, including barriers affecting certain agricultural exports,” Obama said in a letter announcing his decision to Congressional leaders. “I have determined that South Africa is not making continual progress toward the elimination of barriers to U.S. trade and investment as required by section 104 of AGOA.”

The South African government insists the delay is not their fault but the fault of independent veterinarians looking into whether or not U.S. poultry is safe, BBC reports.

Avian flu broke out in about 20 U.S. states this year, BusinessDayLive reported. There have been no new outbreaks for more than 90 days.

South Africa hasn’t issued a needed health certificate and protocol on how to treat avian flu in the U.S., according to IOL.

South Africa has ignored U.S. concerns about blocking U.S. beef, chicken and pork for years, said Representative Ed Royce of California, the Republican chairman of the House Foreign Affairs Committee, in a statement Thursday, IndependentOnline reports.

“It is important for the South African economy, and our continued strong relationship with the people of South Africa, that they resolve these problems and regain AGOA eligibility,” Royce said.

South Africa more than doubled exports to the U.S. since 2000 under AGOA, according to IndependentOnline. Exports under AGOA accounted for more than 20 percent of South African exports to the U.S. in 2014, according to the Stellenbosch-based Trade Law Centre. Total two-way trade between South Africa and the U.S. was about $14 billion in 2014.

U.S. Senators Chris Coons of Delaware and Johnny Isakson of Georgia —  states with large poultry interests — said in a statement, “There is still time to address these issues, and we hope the president’s action today spurs South Africa to open their market to American poultry immediately,” BusinessDayLive reported.

South Africa has done all it can to retain access to AGOA, said South African Trade and Industry Minister Rob Davies in September, IndependentOnline reports.

South Africa’s poultry industry won’t change its requirements unless the government tells it to, said Kevin Lovell, CEO of SAPA, the country’s Poultry Association.

African countries that are disqualified or ineligible from AGOA benefits include the Democratic Republic of Congo, Gambia, South Sudan, Swaziland, Zimbabwe and Sudan. Burundi is being expelled following politically motivated violence. Swaziland lost access in January over workers’ rights issues.