In November 2013, the US Department of Agriculture (USDA) posted a report on the impact of EU trade agreements on US agro-food sector trade with South Africa and the wider region. The USDA report stated that “bilateral agreements between the European Union and countries in Sub-Saharan Africa pose greater competition to market share for US agricultural exports to the region.” In the case of South Africa, the report maintains that “current EU tariff advantages are creating additional barriers to US exports,” following the full implementation of the EU–South Africa Trade, Development and Cooperation Agreement (TDCA) trade liberalisation commitments in 2012.
According to USDA analysis, “since going into effect in 2000, trade between the EU and South Africa has improved substantially as a result of the TDCA.” Indeed, between 2007 and 2012 (the final phase of implementation of tariff elimination commitments), “EU agricultural exports to South Africa surged from $990 million to just over $2 billion.”
This is thought to be the tip of the iceberg of US concerns, given the conclusion of Economic Partnership Agreements (EPAs) and Interim EPAs (IEPAs) at the end of 2007. Ongoing negotiations in the Southern African Development Community (SADC) EPA context are expected “to expand EU market access for pork, dairy, wheat, processed foods and more”.
Table 1: EU tariff preferences on exports to South Africa and value of trade in 2012
|Product||Highest tariff differential (%)|| |
EU export dollar values
US export dollar values
|Average % tariff Difference|
|Frozen poultry not in pieces||82|
|Frozen poultry cuts and offal||37||265||31.1||7.0 °|
|Alcohol with ABV of 80%+||317c /litre||452.0||29.3||16.8|
|Prepared baking powders||30||152.7||33.4||10.6|
|Garlic||325 c/kg to max. 37|
|Guavas, mangoes, mangosteen||35|
|Fruit and nuts||20||20.0||15.2||5.8|
|Flavoured milk, buttermilk etc||450 c/litre to max 96%|
|Whey||450 c/litre to max 96%||106.5||29.3||4.1|
° Special safeguards are also applied against US poultry exports to South Africa
Source: South Africa Customs and Excise Tariffs and Global Trade Atlas, cited in USDA GAIN Report, 26 November 2013 (see below), Table 1
The report also states that “the EU still has significantly more market share than the US partly as a result of preferential access.” The situation is seen as being particularly acute in the poultry sector where, in addition to conventional tariff disadvantages, the US exports are also subject to anti-dumping duties of 940 US cents/kg on frozen chicken cuts.
Table 2: Tariff differentials on poultry between US and EU, 2013
|HS chapter code||Description||General tariff (%)||EU tariff|
Source: South Africa Customs and Excise Tariffs, cited in USDA GAIN Report, 26 November 2013 (see below), Table 2
The significance of the competitive position of US exporters on the South African market lies in the fact that South Africa and neighbouring Southern African Customs Union (SACU) members are the only ACP countries where reciprocal free-trade commitments towards the EU have been fully implemented (with the exception of EU goods exported via Walvis Bay). There is concern in the US that this could be indicative of the competitive position in which US exporters will find themselves once the reciprocal tariff elimination commitments towards the EU agreed under the EPAs and IEPAs are fully implemented.
The US concern takes on relevance for African governments in view of the pending review/renewal of the US Africa Growth and Opportunities Act (AGOA), which is scheduled to expire in September 2015 (see Agritrade article ‘ Africa and the United States discuss the future of AGOA’, 11 October 2013). Pressure could emerge from US agro-food exporters for any new AGOA agreement to embrace elements of reciprocity in the tariff commitments entered into, particularly where individual African governments have in place an EPA with the EU.