South Africa recognises that it is in “extra time” over negotiations over the African Growth and Opportunity Act (Agoa), said Trade and Industry Minister Rob Davies at a press conference in Pretoria.
Noting that it was for the United States to “blow the whistle” on negotiations over the African Growth and Opportunity Act (Agoa), Davies said that it was not South Africa’s call to end negotiations and negotiations would continue in the coming days.
It was reported at the weekend that President Barack Obama was poised to announce that he would suspend duty-free treatment of South African agricultural products.
This would mean that some products – including macadamia nuts, avocados, citrus products, canned fruits, and possibly even wine – exported to the United States would face extra duties which would make them more expensive in that country.
“We are not the ones who blow the whistle but … we are in extra time,” Davies told journalists in Pretoria, but beamed to Cape Town.
It is not for South Africa to prescribe excluded products, this would be up to the United States if they called an end to negotiations.
He was not certain whether wine was included among agricultural products mentioned by the United States.
If suspension of duty-free treatment under the 16-year-old Agoa agreement expanded to motor vehicles, Davies said a BMW sedan car – produced in Rosslyn, Pretoria – would face extra duties of about $1000 on a $400 000 vehicle exported to the United States in the worst case scenario.
Mercedes-Benz cars – which are produced in East London – would not be affected at the moment as there was a Mercedes plant in the US.
However, it could affect Mercedes C class vehicles in the future, said Davies.
Davies said that about R25-billion of total South African exports of R70-billion to the US were affected by Agoa free duties, and it was not clear how much of that R25-billion would be affected by duty changes.
There was no clear idea of what extent new duties would cut exports to the United States, he said.
Agoa, the product of an agreement by former US president Bill Clinton’s administration, came into affect in 2000. It grants privileged access to US markets on the condition that the African states – like South Africa – make progress constantly towards eliminating barriers of entry to US goods as well as investment.
The negotiations have been sticky over US poultry products, in particular, where South Africa has raised issues over salmonella. This appears to be the key issue of disagreement in the negotiations over SA continuing to benefit from Agoa, but Davies still believes that a breakthrough would be made even though deadlines imposed by the US have been reached.
Donwald Pressly is the editor of Cape Messenger