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South Africa takes stock of AGOA benefits

10 April 2015

Pretoria - South Africa says the African Growth and Opportunity Act (AGOA) has had a positive impact on both South Africa and the US, and should therefore be renewed.

“Our key message as South Africa is that AGOA has been something that has been positive for both sides and if we look at it strategically, we think that the case for continuing with AGOA and continuing to include South Africa is a pretty compelling case,” said Trade and Industry Minister Rob Davies.

Briefing reporters on Friday ahead of the departure of a South African delegation to participate in the Trade and Investment Framework Agreement (TIFA) with the US Trade Representative next week, the Minister said statistics show that South Africa’s trade with the US has been growing steadily.

“As of last year, we exported R69 billion worth of products to the US, including value added products and we imported R71 billion worth of goods from the US,” said the Minister.

The delegation that is going to the US will advocate for the renewal of AGOA. Minister Davies said the overall view is that AGOA has delivered and that the case for re-authorisation of AGOA, including South Africa, is a compelling one.

“Our view is that AGOA has not only benefitted us but has also benefitted the US,” he said.

AGOA is a legislation that provides duty-free market access to the United States for qualifying sub-Saharan African countries by extending preferences on more than 4 600 products.

It has created 100 000 jobs in the US and 350 000 direct jobs and 1.3 million indirect jobs in sub-Saharan Africa. In South Africa, AGOA is estimated to have created 62 000 jobs.

“We support the common African position that AGOA should be renewed substantially as it is although there could be many improvements,” said Minister Davies.

The reauthorisation of AGOA is done at US Congress level with the current AGOA set to expire on 30 September 2015.

Ambassador and special envoy for AGOA, Faizel Ismail, said the trip to Washington is to take stock of issues concerning the two countries and AGOA.

“The main purpose of the meeting is to attend the TIFA forum between the US and South Africa and the normal course of business is to take stock of issues that arise between the two countries, and to discuss those issues with a view to finding solutions. This time, one of the issues will be AGOA.”

The delegation will comprise government, business and trade unions. Delegation members have held consultations.

“The discussion that took place reached a consensus that South Africa should go to Washington with a view to finding solutions to any of the outstanding issues that are related to the extension of AGOA.

“The general view is that AGOA has been of interest to South Africa but from the information we received from different industries, the evidence is that AGOA  is of mutual interest to both the US and South Africa.”

Ismail said he believes that it’s not only of interest to South Africa but to the region as it contributes to regional economic development.

Anti–dumping duties

The Minister also addressed issues around poultry trade between the two countries.

South Africa has for quite some time had in place an anti-dumping duty on chicken portions coming from the US.

“That duty is in the context that consumption patterns in the developed world are different from consumption patterns in the developing world,” said Minister Davies.

In the developed world, people eat the white meat then have surplus of brown meat and those products are not saleable in those countries, he said.

“We instituted an anti-dumping duty because we were saying that they were being sold at below the cost of production in South Africa,” Minister Davies explained.

The Minister said South Africa has been willing to assist US senators from poultry producing states by urging the South African Poultry Association (SAPA) to make market access concessions to US exporters of poultry.

The two senators have indicated that while they remain supporters of the extension of AGOA, they come from chicken producing states and that their exporters are demanding increased access to the South African market. The senators have threatened to block the passage of AGOA though the Congress unless South Africa satisfies the demands of their chicken industry.

Minister Davies said he has urged the South African poultry industry to engage with its counterparts in the US -- the United States of America Poultry and Egg Export Council (USAPEEC) -- to find a solution.

“We engaged the [SA industry] and US poultry producers and we said that we want the two associations to find a solution and that the solution will take the form of a quota.

“There have been exchanges between them. We are not at the sweet spot yet where we find each other, to find an agreement around a quota.  Once a solution has been found, government will implement that.”

A further engagement between SAPA and USAPEEC is scheduled to take place on the margins of International Egg Commission meetings. -






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