The South African government needs to take urgent steps to address ongoing trade concerns – particularly the long-running dispute over antidumping duties on American chicken – before US lawmakers start drafting 2015 trade legislation, the US Embassy’s Minister Counselor for Economic Affairs, Laird Treiber, told Engineering News Online in an interview.

Treiber reported that the US government was taking “very seriously” objections by a number of Senators to South Africa’s continued inclusion as a beneficiary of the African Growth and Opportunity Act (Agoa) trade preferences. The objections relate primarily to market access for various agricultural products, especially poultry, but concerns had also been raised about South Africa’s Private Security Industry Regulation Amendment Bill.

The administration remained supportive of South Africa’s continued accession to the unilateral arrangement that extended duty- and quota-free access on some 6 000 tariff lines to eligible African countries.

South Africa was one the few African beneficiaries that made use of a diverse number of tariff lines, with exports ranging from various commodities and agricultural products through to motor vehicles. The country also remained America’s largest trading partner on the African continent with yearly bilateral trade flows of over $20-billion, which were relatively balanced between exports and imports.

However, several Senators had signed letters raising concerns about South Africa’s continued inclusion, with Republican Senator Johnny Isakson and Democratic Senator Christopher Coons having jointly written to US Trade Representative Michael Froman in late January to raise their anxieties.

In the letter the two Senators argued that South Africa’s enforcement, over a 14-year period, of antidumping duties on US poultry was unfairly blocking US exports. They also noted that there had been little progress in resolving the issue between the American and South African poultry industries.

Should there be no resolution before the legislative process to reauthorise Agoa, the Senators would “consider strengthening Agoa to prevent South Africa from benefiting from duty preferences while continuing to discriminate against US goods, specifically poultry”.

MORE SENATORS EXPRESS CONCERN

Subsequently, on March 31, an additional 11 US senators wrote to the South African government expressing their concern about the lack of progress being made in negotiations over the South African antidumping duties.

In the letter, the 13 Senators said they were concerned that little progress had been made to reach a solution and that formal negotiations had yet to take place.

“This work needs to be done urgently, before the African Growth and Opportunity Act is reauthorised. Our support for beneficiary countries’ inclusion in Agoa is, in large part, based on the degree to which they meet their international trade obligations.”

Joining Senators Isakson and Coons in signing the bipartisan letter were John Boozman (R-Ark.), Bob Casey (D-Pa.), David Perdue (R-Ga.), Tom Carper (D-Del.), Dan Coats (R-Ind.), Mark Warner (D-Va.), John Cornyn (R-Texas), Ben Cardin (D-Md.), Chuck Grassley (R-Iowa), Barbara Mikulski (D-Md.) and Tim Kaine (D-Va.).

Treiber warned that, notwithstanding the administration’s support for the extension and South Africa’s inclusion, the US government’s influence over the extension would be limited once both houses of Congress began considering various pieces of trade legislation, including the extension of Agoa. The preferential trade arrangement, which had been amended and extended three times since President Bill Clinton signed it into law in May 2000, was set to expire in September 2015.

He revealed that the US government had been working with the South African government to address the concerns of American business and that some progress had been made during March 6 meetings in Washington DC and further government-to-government interactions were planned for mid-April.

Crucially, a rapprochement also had to be found, Treiber said, between the countries’ respective poultry industries, with South African producers considering an offer of import quotas to mitigate the antidumping duties.

He noted that South Africa already applied 38% import tariff protection on all chicken imports. But once antidumping duties were applied to American exports, they were entirely uncompetitive with those already flowing from countries such as Brazil and Thailand, as well as parts of Europe.

“South Africa already imports between 20% and 25% of this chicken any way. What we are asking for is the right to compete  . . . in terms of supplying that import segment of the South African market,” Treiber explained.

“However, our concern at the moment is that Senate is now drafting trade legislation for this year and Agoa will be part of that set of Bills. We don’t know what their timeline is, but we have told the South African government that it is out of our control – it could be next week, it could be next month.”

Treiber also highlighted the fact that a US Senator had the right to hold back a piece of legislation should he or she have unresolved concerns.

“The point we have made to the South African government and certainly what Senators have made clear to President Jacob Zuma in letters, is that, before they can move ahead with including South Africa, they want to see the chicken issue, in particular, but also the other trade issues, resolved. So we have been encouraging South Africa to take that language seriously. We certainly take it seriously.”