SA has two months to implement latest Agoa deal

© Mykhaylo Palinchak – 123RF.com

US President Barack Obama last 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 15 March".

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

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

They emphasised this did not represent any shifting of goalposts following the agreement announced on 6 January 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 South Africa," 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 SA's Agoa benefits can continue uninterrupted."

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, Obama in November gave SA until 4 January 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.