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South Africa set to lose AGOA benefits

South Africa set to lose AGOA benefits

South Africa

South Africa looks set to lose lucrative duty-free access for its agricultural exports to the United States after officials from both governments failed to reach agreement on outstanding trade issues in a meeting earlier on Thursday.

US and SA trade and veterinary experts held a last-ditch telephonic conference to try and remove the last barriers preventing the importing into SA of US chicken, pork and beef.

This means they will almost certainly miss the January 4 deadline for removing the barriers and so SA will lose the duty-free benefits for its agricultural exports under the African Growth and Opportunity Act (Agoa).

SA exported US$176 million worth of agricultural products to the US last year, mainly citrus and wine. It is not clear how much its exports would be reduced by the loss of AGOA benefits, but it could be a lot as profit margins on agricultural products sales in the US are slim and so the lack of import duties makes a big difference.

SA has allowed virtually no US chicken, pork or beef imports into the local market for several years, partly through anti-dumping duties and partly through health restrictions.

In June, officials from both sides agreed partly to lift the anti-dumping duties on US chicken imports, to allow a quota of 65,000 tons a year to be imported. This would be subject to several conditions being met.

But the South African government continued to block chicken imports anyway because of outbreaks of avian flu in parts of the US and later because of concerns about salmonella infection.

It has also been citing concerns about diseases in pork and beef to block imports of those products.