Launch of EAC–US TIP negotiations potentially complicated by other trade agreements
30 March 2014
EAC and US officials met in February 2014 to discuss a possible Trade and Investment Partnership (TIP) between the East African Community and the United States. US officials reaffirmed the Obama administration’s “commitment to a seamless renewal of AGOA” (the US African Growth and Opportunity Act). The officials maintained that the proposed TIP framework offered “an opportunity to assess the future of the US–Africa trade and investment relationship from a broad and holistic perspective”, including the “identification of complementary, non-tariff-focused efforts to support Africa’s integration into the global trading system”. There was also discussion of “strategies to increase the volume and number of products exported from EAC partner states to the US, as well as to increase the presence and competitiveness of US businesses in the EAC”.
In a potentially significant development, it was noted that “Africa’s evolving trading regimes with other global partners [are] also being considered as part of the US AGOA review.” Press reports in recent months indicate that US agricultural lobbyists are intensifying efforts to have South Africa removed from the list of AGOA beneficiaries, because of the trade restrictions placed on US poultry exports that are not currently imposed on other exporters of poultry meat to South Africa (see Agritrade article ‘ Namibian trade minister pessimistic on SADC–EU EPA agreement’, 17 March 2014).
According to David Wolpert, CEO of the South African Association of Meat Importers and Exporters (AMIE), there was “concern that South Africa’s protectionist policies, such as the increase in import duties on chicken and restrictive regulations on pork imports, may lead to retaliatory trade practices, harming the economy”. It was noted in press reports that “major food and agricultural associations in the US have united to lobby against the extension of the US [AGOA] if South Africa and other African countries continue to impose ‘protectionist’ and ‘antidumping’ measures against US exports.” The associations’ view was formally adopted in a letter to US Congress members and subsequently endorsed in presentations to the US International Trade Commission. The associations argued that nations that maintain “barriers to US exports that go beyond those permitted in trade agreements” should not benefit under AGOA, since “US producers and exporters are unfairly losing export sales and costing the US jobs.” They argued that “a reciprocal free trade agreement should be considered” where a reciprocal preferential trade agreement is in place with the European Union, among others.
In June 2013, President Obama asserted that “AGOA [renewal] must address serious concerns of equal access to South African markets.”
Editorial comment
With South Africa adopting restrictive measures on US exports while extending tariff preferences to EU exports of competing products, and consequent reactions from US trade associations, the approach adopted by the US towards South Africa could well carry wide implications for US–Africa trade relations.
The US agro-food exporters, focusing on the perceived unfairness of South African trade policy, are situating their arguments in the much broader context of the pending conclusion, ratification and implementation of trade agreements between the EU and Africa that are similar to the Trade, Development and Cooperation Agreement (TDCA) already fully in place between the EU and South Africa.
While this may not immediately impact on the renewal of the non-reciprocal AGOA preferences extended to African countries, in the longer term the existence of such preferential agreements is likely to place the negotiation of reciprocal trade arrangements between the US and African countries firmly on the table, once reciprocal tariff elimination commitments entered into under EPA agreements begin to be implemented.
