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The suspension of South Africa’s agriculture benefits from Agoa on March 15 will be lifted as soon as the first shipment of poultry enters the South African market, according to the Department of Trade and Industry (dti). US President Barack Obama on Monday ordered the suspension of duty-free treatment to all Agoa-eligible goods in the agricultural sector from South Africa, effective on March 15.
Obama was expected to make this announcement last Tuesday, after South Africa failed to meet a previous 60-day deadline set by him to finalise negotiations around US meat imports, failing which he said he would suspend certain duty free tariffs on goods that benefit from the African Growth Opportunity Act (Agoa).
The act, renewed by US lawmakers in June, eliminates import levies on more than 7 000 products ranging from textiles to manufactured items and benefits 39 sub-Saharan African nations.
"South Africa's Departments of Trade and Industry and the Department of Agriculture, Forestry and Fisheries are working closely with the local US embassy, local importers and US exporters, to facilitate the first shipments of US poultry under the agreed Quota for US bone-in-chicken pieces," dti spokesperson Sidwell Medupe said in a statement on Tuesday.
“We are thus confident that the first shipment will arrive in the next few weeks and the US President will consequently revoke the above proclamation,” he said.
On January 7 ministers Rob Davies, Senzeni Zokwana and Aaron Motsoaledi announced the conclusion of the negotiations on all the animal health issues related to US poultry, beef and pork.
However, US Ambassador Michael Froman said the US required to see “…American products in local stores” before the final benchmark to lift any threat of suspension was reached.
New 60-day deadline
The National Security Council in Washington told SABC on Tuesday that it was not suspending South Africa's Agoa benefits, but rather setting a new 60-day deadline for South Africa to comply.
"The office of the US trade representative says if the remaining benchmark - the entry of US poultry into South Africa under the agreed-upon conditions - is met before March 15, the president will be able to consider a revocation of the proclamation before suspension takes effect," SABC reported.
Obama can also reinstate full Agoa benefits after a suspension takes place.
"It seems that, although the US is happy that the technical barriers were resolved last week, they are not prepared to let up the pressure on South Africa, and the implicit threat of removing the benefits of Agoa remain.
"Mr Obama’s proclamation is likely the stick to go with this warning (to lift restrictions) – one we hope local authorities will heed to," NKC African Economics analyst Bart Stemmet said in a research note on Tuesday, Reuters reported.
Analysts expect a deal to be struck before the March deadline because Pretoria cannot afford the reputational and financial damage a removal from Agoa would have on an already struggling economy.
"We are confident that the suspension will ultimately be avoided," Stemmet added.