The South African government is confident that America’s AGOA trade agreement with African countries will be renewed once the US government shut down ends.
The shutdown has lasted several weeks, caused by a stalemate between the two major US political parties over funding priorities for government operations.
The Africa Growth and Opportunity Act (AGOA) had offered African countries preferential access to the US market since 2000, but it expired at the end of September. There have since been suggestions that the US government might renew it.
South Africa’s international relations minister, Ronald Lamola, told the Financial Times Africa Summit in London that he believes Africa will get a reprieve when the US government shutdown ends.
“It remains a very strategic platform of our trade with the US, but not only with the US, but some of the other countries in the sub-Saharan parts of our continent,” he said, according to an EWN report.
He also believed South Africa would get a trade deal to lower the current 30% tariffs on South African exports to the United States, saying the tariff and AGOA issues were linked.
“You can’t fully separate AGOA from the tariffs because the tariffs technically nullify AGOA” he said.
Editorial comment:
South Africa’s poultry producers will wait to see how bad the tariff deal will be for them once it is finalised.
While lower US tariffs will benefit South Africa’s automotive and steel makers, and its wine and fruit producers, these benefits will be achieved at the expense of penalties for the country’s poultry industry.
The South African government has offered a 72 000-tonne annual quota of US chicken imports free of the anti-dumping duties that should apply. However, the US is demanding additional benefits, including the reduction or removal of general tariffs on its poultry products.
Whether or not South Africa has agreed to additional tariff concessions remains to be seen.
