South Africa's trade benefits under reviewSouth Africa's trade benefits under review
August 14, 2015
THE Office of the U.S. Trade Representative held a hearing Aug. 7 as part of a congressionally mandated review of whether South Africa should be suspended from the recently renewed African Growth & Opportunity Act (AGOA) because of agricultural market access barriers.
Government officials from the U.S. as well as South Africa gave testimony at the more than two-hour-long hearing.
During the hearing, the National Chicken Council (NCC) and National Pork Producers Council (NPPC) expressed their disappointment with preferential trade programs for South Africa.
South Africa gets duty-free access to the U.S. market for dozens of its products under AGOA and the Generalized System of Preferences (GSP). In 2014, it shipped $1.7 billion of goods to the U.S. under AGOA and $1.3 billion under GSP.
The main message from U.S. livestock groups was that South Africa's trade benefits should be withdrawn or at least limited until the country provides more market access to the U.S.
NCC president Michael Brown noted in his testimony that U.S. poultry has now been unfairly excluded from the South African market for more than 15 years.
"While the industry has long been one of the principal champions of U.S. trade and development initiatives, its faith in those initiatives has been shaken by the failure of some of our trading partners — in this case, South Africa — to live up to their responsibilities," he explained.
Brown said the U.S. government has been inconsistent with enforcing its trade rights. While Congress has now conditionally extended AGOA benefits to South Africa, NCC said its expectations are clear: "South Africa must open its markets to U.S. poultry or lose those benefits. South Africa is on the clock. ... We are watching, and so is Congress," Brown said.
Sens. Johnny Isakson (R., Ga.) and Chris Coons (D., Del.) have been at the forefront of this issue, and their efforts resulted in an amendment to AGOA's renewal that requires this out-of-cycle review of South Africa. The amendment passed the Senate Finance Committee unanimously in late April.
Brown thanked USTR and the U.S. ambassador to South Africa for reaching an agreement in principle with the South African industry and government to reopen trade during meetings in Paris, France, in early June. NCC said South Africa agreed to an annual antidumping duty-free quota of 65,000 metric tons that also allows for future growth.
NCC said the ball is in South Africa's court to take action on the deal made in Paris.
"It is not enough to have reached an agreement in principle in Paris or to initiate various legal processes in South Africa," Brown said. "In our view, South Africa will have only made the progress it is required to make under the AGOA renewal legislation when there are actual imports of U.S. poultry moving into South Africa."
NPPC added that South Africa enforces "harsh and unjustifiable" import restrictions on U.S. pork to prevent diseases that have a negligible risk of transmission from U.S. pork products. For example, the South African Ministry of Agriculture imposes time and temperature requirements on U.S. pork as a mitigation for trichinae, which is nearly nonexistent in the U.S. commercial hog herd.
"South Africa has shown that it is pleased to take advantage of U.S. preferential trade programs but is unwilling to extend even customary equitable treatment to imports of pork from the United States," NPPC said in comments to USTR.
NPPC pointed out that the U.S. Department of Agriculture has offered to certify that pork exported to South Africa comes only from farms participating in the U.S. pork industry's Pork Quality Assurance Plus program, which includes biosecurity measures to prevent exposure of pigs to sources of trichinae. Although a number of other countries have accepted the certification, South Africa has rejected it.
NPPC said South Africa is maintaining trade barriers despite overwhelming evidence that the barriers are not supported by international standards or any legitimate scientific or World Trade Organization-justifiable reason and is making no effort to lift them.
"We have undertaken efforts to accommodate South African demands, even though we know and its officials know that they are unnecessary," NPPC said. "We have done this with enormous trepidation because of the risk that other countries will see the South African approach as a model for how to restrict imports without raising tariffs, but it is time to draw the line."
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