US President Barack Obama has drawn a line in the sand, giving South Africa until March 15 to comply with the African Growth and Opportunity Act (Agoa) – which gives the country access to the US market – or lose duty-free treatment to agricultural goods it exports to the United States.
In a proclamation issued Monday by the White House, Obama said that suspending the application of duty-free treatment to certain South African goods, including wine and citrus, would be “more effective in promoting compliance by South Africa” than terminating the designation of South Africa as an Agoa beneficiary.
Certain issues, predominantly health concerns, have prevented US pork, beef and poultry from being sold in South African stores.
“Because the final benchmark – resumption of US poultry imports to South Africa – was not completed by the January 4 deadline, we must move forward with a proclamation that would suspend South Africa’s Agoa benefits in the agricultural sector, with an effective date for the suspension of March 15, 2016,” the US Embassy in Pretoria said in a statement.
“Now that the substantive points of disagreement have been resolved, we hope and expect the resumption of trade in the three meats to take place smoothly and expeditiously,” the embassy said.
No suspension of benefits is taking place immediately.
If US poultry is not allowed to enter South Africa by March 15, Obama may consider revoking the proclamation before suspension takes effect, the embassy said.
“The President can also reinstate full Agoa benefits for South Africa any time after he has determined that South Africa is meeting the criteria laid out by the Congress,” it noted.
Last week, the Department of Trade and Industry (dti) expressed confidence that outstanding Agoa issues would be resolved. “South Africa believes that with some flexibility from both sides the final touches to the agreement, on which 95% of the work has been done, can be completed with some extra-time,” the dti said in a statement.
Moneyweb awaits comment from the dti.
AgriSA CEO Omri van Zyl said Obama put South Africa on terms to implement the agreement that was reached between the two countries. “We now have to get the US goods on our shelves, otherwise we will face full import duties (on South African exports to the US)”, he said.
Van Zyl said AgriSA is in touch with the dti about the issue. The department has indicated that it will meet its US counterparts again on Wednesday about the implementation of the agreement, he said.
AgriSA is still positive that South Africa will continue to benefit from the exclusion of many of its exports to the US under Agoa.
Brought to you by Moneyweb
Download our app and read this and other great stories on the move. Available for Android and iOS.
