Barack Obama. Picture: REUTERS/JONATHAN ERNST
Barack Obama. Picture: REUTERS/JONATHAN ERNST

WASHINGTON — SA has two months to show it is implementing last week’s 11th hour agreement to open its market to US poultry and other meats or it will again face loss of trade preferences under the African Growth and Opportunity Act (Agoa).

The Department of Trade and Industry on Tuesday expressed confidence that it will meet the requirements to retain its Agoa benefits.

US President Barack Obama on Monday night said he had “decided to suspend the application of duty-free treatment for all Agoa-eligible goods in the agricultural sector from South Africa … effective March 15”.

Mr Obama had been set to pull the trigger on South Africa’s Agoa benefits last Tuesday, but has now given South Africa a further grace period.

If US poultry is allowed into South Africa on or before March 15, the president will be in a position to revoke yesterday’s proclamation before it takes effect, US officials said.

They emphasised this did not represent any shifting of goalposts following the agreement announced on January 6 by Trade and Industry Minister Rob Davies and US Trade Representative Michael Froman.

“With the substantive points resolved, we are able to move to the final benchmark, testing the new system to make certain American poultry can be made available on store shelves in SA,” US trade office spokesman Trevor Kincaid said.

“We have extended the effective date of any Agoa action to allow sufficient time for our products to enter South Africa, and are making sure with stakeholders in both countries this happens quickly so South Africa’s Agoa benefits can continue uninterrupted.”

The Department of Trade and Industry said on Tuesday it was working closely with the Department of Agriculture, Forestry and Fisheries, the US embassy in Pretoria, local importers and US exporters, to facilitate the first shipments of US poultry under the agreement.

“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,” the department’s statement said.

US embassy spokeswoman Cindy Harvey said the embassy hoped and expected “the resumption of trade in the three meats to take place smoothly and expeditiously”.

The system agreed by the two sides includes a procedure for rebating antidumping duties on an annual quota of 65,000 tonnes of frozen chicken portions from the US plus mutually acceptable protocols to ensure the safety of South African consumers and livestock.

At the behest of Congress and meat industry lobbyists, Mr Obama in November gave South Africa until January 4 to remove remaining barriers to US chicken, beef and pork, barriers the US judged to be unwarranted and not in line with World Trade Organisation rules.

The physical availability of US poultry in South African shops by the end of 2015 — after an absence of 15 years — was agreed as the key benchmark South Africa had to meet to avoid Washington reimposing normal duties on South African citrus, wine, macadamia nuts and other agricultural goods.

The deadline passed as the two sides deadlocked over salmonella inspections and country of origin requirements for US beef. 

Those and other remaining differences were bridged in urgent “extra time” talks last week.

Asked how long it would take for shipments of US chicken to start reaching South Africa, Mike Brown, president of the US National Chicken Council, said it was “just a matter of the South African government issuing import certificates for South African importers and the US government’s food safety and inspection service issuing paperwork to US exporters. I would hazard a guess that we could be in country within … 30 or so days by boat.”

US officials were not immediately able to say what would happen if the precipitate fall of the rand against the dollar priced US chicken out of the South African market.

It was also unclear whether ongoing uncertainty about the duty-free status of South African products would affect orders from US importers, especially of South African citrus, which faces stiff duty-free competition from South America.

Agoa is not a trade agreement but a unilateral grant of preferential access to the US market subject to conditions set by Congress and administered by the US Trade Representative’s office.

With Linda Ensor