Goading the US on AGOA

Here’s a question I have about the time the South African government is taking to remove barriers to US chicken, pork and beef exports. Is Pretoria acting in good faith? Or is Minister of Trade and Industry Rob Davies deliberately trying to provoke the Obama administration into suspending South Africa’s benefits under the African Growth and Opportunity Act? Publicly, he keeps insisting that SA is doing every it can to get things resolved. And yet one hears that every time there’s a meeting, the SA side raises some new complication.

Davies sits on the central committee of the SA Communist Party whose fingerprints are all over a draft ANC policy document which all but declares the US a hostile power. The chapter on international relations asserts that Washington has launched a new cold war against China and Russia and accuses the US of working to destabilise SA’s “progressive” friends the world over. The SACP might well consider it a propaganda coup if the US were to reimpose tariffs on key SA exports for what Davies would claim was no good reason. Look, the wicked imperialists are trying to destabilise us too! Continue reading “Goading the US on AGOA”

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Do South Africa’s ideologues really want AGOA?

That the US Congress will vote to extend the African Growth and Opportunity Act any day now apparently brings no joy to the heart of Sandile Tyini, Trade and Industry Minister Rob Davies’ man at the Washington embassy.

At a gathering of African Union ambassadors on Monday, Mr Tyini lamented the new “conditionalities” in the reauthorization bill, attendees said.

This, they also said, elicited no sympathy from the ambassador of Gabon, who was chairing the session, or other African colleagues. They want to see the bill enacted promptly. Uncertainty has been killing export orders.

Strictly, the language adopted by both Senate Finance and House Ways and Means Committees last month imposes no extra eligibility requirements. It simply makes it easier for interested parties to complain if beneficiaries are non-compliant and lets the US government apply the screws in more calibrated ways.

For most, the threat of greater scrutiny is a small price to pay for 10, as opposed to 5 or 3, more years of privileged access to the US market. But not, it seems, for SA. Continue reading “Do South Africa’s ideologues really want AGOA?”

Home to roost

It’s common to hear people who should know better call the African Growth and Opportunity Act an agreement. It isn’t. It’s a one-way grant of preferential access to the American market for African countries that meet certain criteria. The recipients made no binding concessions of their own to secure these preferences. The donor calls the shots. That’s life.

The US wanted to negotiate a free trade agreement with South Africa after AGOA went into effect.  The negotiations failed in 2006 leaving a sour taste in Washington’s mouth. South Africa says they failed because the US was asking for more than its South African Customs Union partners — Namibia, Botswana, Swaziland and Lesotho — felt able to give. That’s not an excuse that’s universally accepted on the US side. The feeling here is that South Africa preferred to keep getting without giving.

Now come the consequences. What’s given unilaterally can also be taken away unilaterally. The US is threatening denial of AGOA benefits to get what it wants. That includes a share of the SA market for frozen chicken legs and wings.  SA says US exporters were dumping their surpluses on SA at less that the cost of production before punitive duties were imposed in 2000.

Were it so inclined, the US government could take SA to the World Trade Organisation over those duties. Why hasn’t it? Two reasons. One, success is by no means certain. Two, Washington has another tool to work its will: the threat of dropping SA from AGOA.

Now, as a result of the chicken dispute, it looks likely that the US Congress will renew AGOA with a clause obliging the US Trade Representative (the person, Michael Froman, and the agency he runs) to launch a review of South Africa’s eligibility within 30 days of the the renewal legislation becoming law.

The legal language mandating the review calls for it to be conducted with reference to a specific subsection — highlighted in italics below — of AGOA’s section 104: Continue reading “Home to roost”