South Africa Says AGOA Is Resolved. U.S., Not So Much

South Africa Says AGOA Is Resolved. U.S., Not So Much

Negotiations concluded Wednesday between South Africa and the U.S. over health issues related to meat imports, and South Africa should still be part of the African Growth and Opportunity Act (AGOA), South African Minister of Trade and Industry Rob Davies told media on Thursday.

“We are calling on the U.S. to do the right thing and retain our involvement in AGOA without any interruptions,” Davies said, TimesLive reported.

Negotiators “cracked” the deal Wednesday, Davies said. The U.S. has signed all documents surrounding the health issues. Now Davies is awaiting formal indication from the U.S. that the agreement has been concluded, he said.

In a statement late Thursday, U.S. Trade Representative Michael Froman said the U.S. still needed to ensure South Africans were able to purchase U.S. poultry products before confirming that South Africa could enjoy full AGOA benefits, Reuters reported.

“While we celebrate the progress we have made in resolving the outstanding technical issues, the true test of our success will be based on the ability of South African consumers to buy American product in local stores,” Froman said.

AGOA allows preferential treatment including duty-free access to U.S. markets for 39 African countries on more than 7,000 products from textiles to manufactured goods. To qualify, African countries must eliminate barriers to U.S. trade and investment, operate a market-based economy, protect workers’ rights and implement economic policies to reduce poverty.

In November, U.S. President Barack Obama gave South Africa until Dec. 31 to lift barriers to U.S. meat and chicken exports or face suspension of trade preferences on products such as wine, citrus, macadamia nuts and avocados under AGOA, according to an earlier AFKInsider report.

South Africa missed the Dec. 31 deadline.

If the AGOA issues have been resolved, the U.S. can export 65,000 tonnes of U.S. poultry to South Africa.

“The actual arrival of poultry products into the market has been open since 11:00 this morning,” Davies said Thursday.

South African agriculture exports stand to lose the most initially if the U.S. excludes the country from AGOA status going forward.

Almost 80 percent of South Africa’s agricultural exports to the U.S under AGOA come from the Western Cape, Bloomberg reported. The U.S. is South Africa’s fifth-largest export market for wine.

The U.S. is also the largest wine market in the world, according to industry association Wines of South Africa.

Michael Jordaan, chairman of Wines of South Africa, told Fin24 that resolution of the AGOA deal is great news.

“Africa needs less aid, which paints us as a charity case, and more free trade, which allows us to compete on a level playing field,” Jordaan said. “Ideally we would like to trade freely within Africa, but also with Europe and China.”

South Africa’s wine market share is significantly lower in the U.S. than in Europe, according to Fin24.

BMW and Mercedes, with production plants in South Africa, are among the luxury automakers that stand to benefit from continued duty free protection through AGOA, Mail&Guardian reports.

Continued participation in AGOA will provide relief of about $47-million in tariffs, Davies told reporters. Most of that will apply to the automotive sector in South Africa, he said.