Publications
Partners
The US this week backed off its threat to partially cut off South Africa’s benefits under the African Growth and Opportunity Act (Agoa), after extracting a few concessions on disease monitoring for its meat exports.
The threat had been to reinstate tariffs on South African wine, macadamia nuts and oranges, while maintaining tariff-free access for vehicle exports to
the US. A number of technical protocols for readmitting US meats were finalised on Wednesday and announced by Trade and Industry Minister Rob Davies on Thursday.
This paved the way for the planned 65 000-ton-per-year quota of US bone-in chicken pieces that was released for comment last year.
In November, the US made good on a long-standing threat to use Agoa to turn the screws on South Africa.
A 60-day “ultimatum” was declared, setting a deadline for the admission of an annual quota of US bone-in chicken pieces into South Africa without the standing antidumping duty, as well as relaxing controls on the health-related issues associated with US meat.
US embassy spokesperson Heidi Ramsay put out a statement on Thursday evening, saying all the “substantive” issues had been sorted out and an official announcement from the White House was expected “in the coming days”.
The terms of the ultimatum were, however, that it would only be formally retracted once American chicken actually landed in South Africa.
While the actual impact of 65 000 tons of US chicken will be small on the local industry, the issue has become a rallying point for opponents and proponents of Davies’ stance against US demands.
Though the battle has revolved around chicken and other meat products, there are other, more far-reaching complaints against South Africa from US business groups for which the “chicken war” could set a precedent.
In particular, a new generic-medicines-friendly intellectual property policy is in the works and has US pharmaceutical and software lobbies upset.
Local and US lobbying groups have vociferously opposed a plan to restrict foreign ownership of security companies, while other elements of trade policy are routinely complained about in US corporate submissions to the annual review of Agoa eligibility of all African countries.
The US threat to cut off the Agoa benefits for agricultural products left it with the far larger bargaining chip of potentially later revoking South Africa’s Agoa benefit for vehicle exports. The largest single part of Agoa trade in South Africa is the 40 000 BMWs and car parts shipped every year.
The agricultural threat against South Africa combined two new features of Agoa after the US Congress renewed it last year. The out-of-cycle review is separate from the normal annual review of all Agoa countries and allows specific US corporate complaints against African countries to be taken up, using Agoa benefits as a stick. The power to strategically remove only parts of a country’s Agoa benefit is also a new tool created last year, which was immediately used against South Africa.
In the meantime, the US has gone through the motions of renewing all the other 40-odd Agoa-eligible countries, with the exception of Burundi, which was kicked out, effective last week, because “the continuing crackdown on opposition members, which has included assassinations, extrajudicial killings, arbitrary arrests and torture, have worsened significantly during the election campaign that returned President [Pierre] Nkurunziza to power earlier this year”, according to the US.
Agoa eligibility rests on two pillars: a commitment to free trade and good governance.
Swaziland was ejected from Agoa at the end of 2014, but Lesotho stayed put despite experiencing a coup that same year.
One of the submissions to the US Congress during last year’s Agoa review was from clothing giant Gap, which asked for the countries it sourced clothes from for the US market to stay in the scheme.
These evidently still included Lesotho, but Gap’s submission was curiously redacted to hide the African countries where it had contracted factories.
