“I have decided to suspend the application of duty-free treatment for all AGOA [The African Growth and Opportunity Act]-eligible goods in the agricultural sector from South Africa for purposes of section 506A of the 1974 Act, effective on March 15, 2016,” US President, Barack Obama, said in a statement.
This news comes at a time when South Africa’s economic climate is worsening with the local currency on a freefall.
Obama said that Africa’s second largest economy had not met requirements making the country eligible as a beneficiary of the AGOA treaty.
AGOA, signed in 2000, allowS select products to access the United States market duty-free.
“Suspending the application of duty-free treatment to certain goods would be more effective in promoting compliance by South Africa with such requirements than terminating the designation of South Africa as a beneficiary sub-Saharan African country,” added Obama.
U.S. Embassy in Pretoria offered the following clarification on Obama’s statement
On January 11, 2016, President Obama signed a proclamation regarding the African Growth and Opportunity Act (AGOA), requiring the entry of U.S. poultry into South Africa before March 15, 2016. This proclamation does not immediately suspend AGOA trade benefits for South Africa. As has been reported in the media, U.S. negotiators have worked closely with South Africa, particularly over the last 60 days, to remove barriers to South African imports of U.S. poultry, pork, and beef. On January 6, 2016, we agreed on the remaining issues that prevented such trade. We appreciate the efforts of South Africa’s Ministers of Trade, Agriculture, and Health and their staff to reach an agreement which protects thousands of South African jobs and our trade ties.
Now that the substantive points of disagreement have been resolved, we expect the resumption of trade in the three meats to take place smoothly and expeditiously. Under the proclamation, AGOA benefits will only be at risk of suspension if trade in poultry does not resume by March 15. U.S. and South African officials are working now to ensure the first imports of U.S. poultry arrive in South Africa as soon as possible, well ahead of the March 15 deadline.
South Africa's Department of Trade and Industry issued the following statement:
South Africa wishes to clarify that all its AGOA benefits remain in place and the new proclamation issued by President Obama announcing the suspension of agriculture benefits on the 15th of March will be lifted as soon as the first shipment of poultry enters the South African market.
At the press conference held in Pretoria on the 7th of January, Ministers Rob Davies, Senzeni Zokwana and Aaron Motsoaledi announced the conclusion of the negotiations on all the animal health issues related to US poultry, beef and pork.
It should be recalled that the US Trade Representative, Ambassador Froman confirmed this outcome in his statement later the same day when he stated that: “We are pleased that South Africa and the United States reached agreement to resolve barriers to US poultry, pork and beef.” However, Ambassador Froman did indicate that the US required to see “…American product in local stores” before the final benchmark to lift any threat of suspension is reached.
South Africa’s Departments of Trade and Industry and the Department of Agriculture, Forestry and Fisheries are working closely with the local US Embassy, local importers and US exporters, to facilitate the first shipments of US poultry under the agreed Quota for US bone-in-chicken pieces. We are thus confident that the first shipment will arrive in the next few weeks and the US President will consequently revoke the above proclamation.
A number of queries have been received on the process to access the Quota on US bone-in chicken. The Quota has been implemented by the creation of Rebate Item 460.03/0207.14.9/01.07. A volume of 16 250 MT is available for use until 31 March 2016 on a first come first serve basis for all importers under this rebate item. The only process required is to clear the goods under this rebate item at the time of entry of the goods into South Africa and for a sufficient portion of the volume of 16 250 MT being available to cover the volume of bone-in chicken pieces being imported. No special forms or permits will be required until 1 April 2016.
A volume of 65 000MT will be made available for use under this rebate item on a twelve month basis from 1 April 2016. This volume will only be accessible by importers that received a quota allocation from the Department of Agriculture, Forestry and Fisheries (DAFF) and a corresponding rebate permit issued by the International Trade Administration Commission of South Africa (ITAC). DAFF will publish a notice shortly inviting all interested parties to apply for a quota allocation. Once a quota allocation has been received from DAFF, importers will be able to apply for a rebate permit from ITAC as set out in the Guidelines Pertaining to a Temporary Rebate Provision which provides for the Rebate of the Full Anti-Dumping Duty on Bone-In Chicken Pieces Classifiable in Tariff Subheading 0207.14.9. These Guidelines can be accessed on ITAC’s website at www.itac.org.za.