Statement by Francois Baird
South Africa’s exclusion from United States trade benefits under the African Growth and Opportunity Act (AGOA) has been signalled for some time, but it is unpleasant and will have long-term consequences.
It will hit a number of South African industries, particularly in the automotive and agricultural sectors. They have benefited since the programme’s inception in 2000, but now profits will decline and jobs will be lost.
A statement by the US government said President Donald Trump intended to “terminate” AGOA membership for South Africa and Rwanda from next year. It said the two countries “are engaging in practices that are inconsistent with AGOA’s eligibility criteria”.
“In South Africa, the Trump Administration is deeply concerned by barriers to U.S. trade and investment, corruption, and threats to U.S. national security and foreign policy interests,” the US statement said.
The exclusion takes effect on 1 January next year.
While the AGOA benefits have been widespread, providing duty-free access to US markets, one South African industry has been penalised. Since 2016, South African poultry producers have had to contend with a substantial annual quota of US chicken free of the anti-dumping duties that should apply.
That was forced on them by the US, as a condition for continuing benefits to other South African industries. It was a licence to dump chicken portions in South Africa.
Indications are that the damage will continue, despite the fact that the quota should have been cancelled a year ago under AGOA rules, after South Africa’s AGOA benefits were negated by new US worldwide tariffs. It should be cancelled anyway, now that AGOA has gone.
However, South Africa’s trade negotiators are reported to have offered the US a 72 000-tonne annual quota of duty-free US chicken to help secure a new US trade deal. Details have not been published, and no trade deal has been finalised.
AGOA gave the Americans the idea of a dumped chicken quota. Now they’re trying to make it permanent, without AGOA, at the expense of a viable South African poultry industry and the thousands of jobs it sustains in rural areas.
It’s yet another sore point as South Africa is forced out of a beneficial trade relationship with the US.
• Francois Baird is founder of the FairPlay movement
