The government is likely to allow some US chicken imports into the local market at lower tariffs in exchange for continued participation in the lucrative African Growth and Opportunity Act (Agoa) preferential trade scheme.
According to BusinessReport, President Jacob Zuma is leading a major charge by the government and business at the US-Africa summit in Washington this week to win renewal of Agoa, which allows almost 95 per cent of South African exports into the US market at zero or greatly reduced tariff rates.
Yesterday, President Zuma urged the influential US Chamber of Commerce to support the renewal of Agoa for 15 years with South Africa’s participation when it expires next year.
Although President Barack Obama’s administration supports Agoa’s renewal, the decision will be made by Congress and some US business interests and legislators want South Africa to be "graduated" because it is an upper-middle-income country and because they say it is discriminating against US imports.
Tom Donohue, the president and chief executive of the US Chamber of Commerce, told President Zuma that the chamber was lobbying Congress hard for a renewal of Agoa with South Africa in it. But he said South Africa needed to protect US intellectual property rights and trademarks, strengthen investor protections, repeal anti-dumping measures "and settle ongoing issues over ownership of foreign-headquartered firms".
Officials said South Africa was responding to these complaints by considering the introduction of a tariff rate quota agreement, which would allow a quota of US chicken imports into the local market at lower tariffs.
And Trade and Industry Minister Rob Davies disclosed last week that his department was investigating complaints by the US government that restrictions on US pork and beef imports on health grounds were "unfair and unscientific".
President Zuma told the chamber that renewing Agoa would benefit not only South Africa, but also the US and Africa as a whole.
"Our message to you today is simple. South Africa is open for business, open for tourism and open for partnerships in many sectors," President Zuma said.
"There are many opportunities to be explored in our country and beyond."
One of the key instruments that would help to expand trade relations with the US was Agoa, President Zuma added.
"Agoa has transformed the economic landscape for many African countries and South Africa. It is the cornerstone of trade relations between the US and sub-Saharan Africa.
"Agoa has also greatly enhanced trade between the US and South Africa. Almost 95 per cent of South African exports receive preferential treatment under Agoa. We advocate the renewal of Agoa for another 15 years with the inclusion of South Africa.
"We strongly believe that by endorsing the extension of Agoa, the US will be promoting African integration, industrialisation and infrastructure development.
"South Africa’s economic growth is inextricably linked to that of Africa as a whole. That is why we put great emphasis in developing, not only our country’s infrastructure, but that of the African continent too," President Zuma said, describing his work as champion for the AU’s project to build a North-South transport and trade corridor to link Durban via Dar es Salaam to Cairo.
