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South Africa lists five reasons for continued Agoa eligibility

Trade and Industry Minister Dr Rob Davies
Photo by Duane Daws
Trade and Industry Minister Dr Rob Davies

4th August 2015

By: Terence Creamer
Creamer Media Editor

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South Africa planned to offer five reasons as to why it should retain its status as an African Growth and Opportunity Act (Agoa) beneficiary during public hearings scheduled for Friday in Washington DC.

The US House of Representatives passed a ten-year extension to Agoa in late June and President Barack Obama signed its renewal soon thereafter.

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Once signed, however, South Africa faced an ‘out-of-cycle’ review, which would assess the country’s continued eligibility under Section 104 (a) of the Act, which deals with a beneficiary’s progress towards being a market-based economy with open, rules-based trading and minimal government interference.

Prior to the extension, the US had warned that South Africa’s inclusion hinged on it making market-access concessions for US poultry exporters – a deal that was eventually concluded between the respective poultry industries during a meeting in Paris, France, in early June.

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South Africa sustained its 15-year antidumping duties on American chicken imports, but set a 65 000 t/y quota for bone-in chicken cuts arising from the US; a concession that was expected to smooth the way for its continued Agoa eligibility.

Trade and Industry Minister Dr Rob Davies told the Parliamentary Portfolio Committee on Trade and Industry on Tuesday that South Africa’s approach to the public hearings had already been canvassed with stakeholders, who had agreed to coordinate their messaging.

“Our common view is that South Africa meets all the eligibility criteria to remain a beneficiary of Agoa for the next ten years,” Davies said, while outlining the country’s five key arguments.

Firstly, South Africa would highlight the contribution of Agoa to the building of a “mutually beneficial partnership” between South Africa and the US. “Agoa has helped to transform the trade relationship between South Africa and the US from one based mainly on exports of commodities to one based on more value-added trade in manufactured products,” Davies said.

The unilateral trade concession, which had been in place for 15 years and was initially set to expire at the end of September, had also created 100 000 jobs in the US and 62 000 in South Africa. “Therefore, Agoa is a win-win for both South Africa and the US,” Davies said.

Secondly, the arrangement was supportive of regional integration and progress in this regard could be undermined by excluding South Africa as a beneficiary.

Thirdly, the Act contributed to the fight against poverty, unemployment and inequality in South Africa, which remained a threat to the country’s growth and development, despite its relative development when compared with many other Agoa beneficiaries.

South Africa had also made “significant and continual progress” in addressing America’s bilateral trade and investment concerns, including sanitary and phytosanitary issues surrounding poultry, beef and pork, as well as the export of US poultry to South Africa.

“Lastly, SA is a relatively open economy and trade and investment relations between South Africa and the US have continued to grow and deepen during the period under Agoa.”

Bilateral mechanisms, such as the yearly Trade and Investment Forum had provided an excellent forum for the resolution of trade and investment concerns, Davies added.

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