6 January 2016

South Africa: Business, Agriculture Concerned About Agoa Negotiations

Photo: United States Trade Representative
Agoa logo (file photo).

The "impasse in negotiations" between South Africa and the US on issues surrounding the African Growth and Opportunity Act (Agoa) is of great concern, the South African Chamber of Commerce and Industry (Sacci) said on Wednesday.

Agoa was signed into law by the US Congress in May 2000 as a trade preference programme to help spur market-led economic growth and development in sub-Saharan Africa. At the core of Agoa are tariff benefits that provide duty-free access to the US market for certain products from eligible sub-Saharan countries.

Agoa was renewed by US lawmakers in June, but South Africa has failed to meet a deadline to resolve certain disputes in order to remain part of the programme.

"SA stands to lose jobs and billions of rands should the US go ahead with the exclusion of SA from Agoa benefits. Continued reassurances from government to South Africans that everything is still on track and that there is hope of finding a solution are a welcome relief," Sacci said on Monday.

The exclusion of specified agricultural products not only impacts the agricultural sector but stands to affect overall trade in South Africa negatively, in Sacci's view.

"While we appreciate the need for South African health authorities to control and manage the standards of health around what is being imported into the country, we urge all parties involved in the impasse to do everything reasonably possible to resolve all outstanding issues so that this does not negatively affect trade relations between South Africa and the US," said Sacci.

The chamber said it trusts that all parties involved have the capabilities to resolve outstanding issues to the mutual benefit of both countries.

"As one of the most economically advanced country in the region, South Africa provides for the bulk of US imports under Agoa. It also exports a much more diverse range of manufactured goods than other Agoa countries. Vehicles in particular have become a major South African export under Agoa," explained Christo van der Rheede, deputy executive director of AgriSA.

He said it is worrying that SA is at risk of losing its Agoa benefits over unresolved health issues related to US meat imports. Veterinarian authorities from both countries are hard at work to resolve these sticking points, and it is to be hoped that a speedy resolution will be found.

"South Africa's suspension from Agoa will hugely affect lucrative agricultural exports such as citrus, macadamia nuts, wine, canned food, avocados, etc. The last thing South Africa now needs is more economic shocks to an already very fragile system," said Van der Rheede.

Source: Fin24

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