Press reports in May 2014 indicated that the South African government “will consider giving some US producers the same access to the local market as the EU, if that’s what it takes” to save South Africa’s benefits resulting from the US African Growth and Opportunity Act (AGOA). South Africa’s offer was made against the background of concerns voiced by US legislators over the tariff preferences extended to some countries (notably the EU) that are not extended to US exporters. Products affected by what is seen by some in the USA as discrimination include chicken, pork and beef. The US Department of Agriculture reported in April 2014 that “conservative estimates indicate that the United States’ beef, poultry and pork industries (including pet food) are currently losing out on annual trade to South Africa worth about US$175 million, which is just over half the value of existing US agricultural exports to South Africa.” In contrast, South Africa imports “beef, poultry and pork products worth about US$630 million, largely from Europe, Brazil, and Canada” each year.
In November 2013, 15 US agricultural and machinery groups sent a letter to the US Congress expressing concerns over South Africa’s future participation in AGOA, given South African protective trade measures that they considered unjustly targeted US exporters. These concerns were reiterated in January 2014 before the US International Trade Commission in testimony from representatives of the US National Chicken Council.
The future of AGOA will be discussed at the first Africa–US summit to be convened in August 2014. It is thought that the summit could include discussion of moves towards reciprocity. However, South Africa’s Trade and Industry Minister recently expressed satisfaction with AGOA in its current form.
South Africa and the neighbouring Southern African Customs Union (SACU) countries of Botswana, Lesotho, Namibia and Swaziland are the only ACP countries with a free trade area agreement with the European Union fully in force. The tariff advantages this gives EU exporters compared to their competitors from the US or Brazil was vividly illustrated in October 2013, when South Africa introduced higher MFN tariff duties on five poultry products, with the exception of imports from the EU (see Agritrade article ‘ South Africa selectively raises duties on five poultry items within WTO...’, 17 November 2013). As a result of the higher duties, imports from non-EU suppliers fell and imports from the EU increased. This continued a trend that saw EU poultry meat exports increase from 7,938 tonnes in 2009 to 131,970 tonnes in 2012.
The EU also enjoys tariff advantages ranging from 6.6 to 10% on exports of oilseed products to South Africa (see Agritrade article ‘ Review of South African oil crops sector’, 5 July 2011). It is this type of tariff discrimination that US exporters are increasingly lobbying to have removed.
The issue has taken on added significance in 2014 as the 1st October deadline for the implementation of EU–ACP Interim EPA agreements approaches. US exporters are concerned that the type of tariff advantages enjoyed by the EU under the EU–South Africa Trade, Development and Cooperation Agreement would be extended to EU exports to other African countries once the various Interim EPA agreements begin to enter into force from 1 October 2014.