From iOL

US ambassador to South Africa Patrick Gaspard has warned the South African Government that its “unnecessary and unscientific” trade barriers on US food imports are jeopardizing the renewal of the vital African Growth and Opportunity Act (Agoa).

The legislation gives duty-free access to the US market for most South African exports. It is up for renewal in the US Congress next year, but US agribusinesses in particular are lobbying hard for South Africa to be cut out of it.

Gaspard also warned that uncertainty over government policies and labor unrest were increasingly threatening foreign investment.

Gaspard, a close confidante of President Barack Obama and a former unionist, was delivering his first policy speech, at Unisa in Pretoria, after arriving in South Africa five months ago. He noted that in 2012 South Africa had exported US$2.1 billion (R23bn) worth of goods to the US under Agoa and that for car manufacturers particularly, Agoa was critical to their decisions to invest in South Africa.

In 2012, South Africa exported 60,000 cars to the US under Agoa.

Gaspard repeated that Obama supported the renewal of Agoa when the current supporting legislation expired next year. But “he needs to be able to show American businesses and Congress that there is a level playing field for trade between the US and South Africa.”

US businesses and legislators were asking “why should we give Agoa privileges to South African companies when US products are prevented from accessing this market,” Gaspard said.

He referred to “unnecessary and unscientific” barriers against US poultry, beef and pork which had inspired a group of 15 major US agricultural associations representing 120,000 farmers and 8,000 agribusinesses to call on Congress last year not to renew Agoa.

Gaspard warned that the loss of Agoa access – plus the volatile labor climate – could further influence car manufacturers to move plants out of South Africa.

US companies had told him that high-profile strikes shutting down entire sectors and industries for long periods, coupled with violence, were discouraging them from risking investment in South Africa.

This would lead to fewer jobs.

Written by Peter Fabricius/Read more at iOL