AGOA
Free ride or a very expensive lunch?
Donald MacKay, Director XA International Trade Advisors
xa.co.za
SA exports to the USA
90
R ‘000 000
78
80
70
67
64
60
59
60
53
50
47% increase in 5 years
40
30
20
10
0
2010
2011
2012
2013
2014
2015
Profile of exports to the USA
35%
30%
29%
5200
28%
25%
26%
25%
22%
22%
20%
Approximately 5200 products qualify for duty- free
access into the US market, of which around 800
are agricultural
15%
10%
10%
10%
9%
5%
4%
5%
3%
3%
2%
0%
Vehicles
Base metals and articles of base
metal
Precious metals and jewelry
Chemicals
2010
2015
Minerals
Agricultural and agro processed
products
Other
China is becoming competitor in AGOA
China is investing in Africa to gain
access to the USA
No free lunch with AGOA
Without reciprocity there is no negotiating power
An FTA was meant to follow AGOA
• SA is not an easy beneficiary of AGOA
• The USA would still like to have an FTA
• Without an FTA it is debatable whether SA will benefit following the existing 10-year renewal
• Out-of-cycle reviews place SA in a difficult trade policy position
“While the eligibility requirements are set out in the legislation, it is the United States
which determines, annually, whether countries have met the published eligibility
requirements. Beneficiary status may therefore be granted, or withdrawn, at the
discretion of the US President.”
“Beneficiary countries have no recourse to dispute settlement in this regard, and
this unpredictability is one aspect that differentiates AGOA’s non-reciprocal
preferences to those contained in reciprocal and bilateral trade agreements.”
- AGOA.info
The renewal of the African Growth and Opportunity Act (AGOA) is
a perfect example of subliminal racism and colonial domination.
US poultry producers were stopped from dumping their chicken
waste in South Africa for 17 years with anti-dumping duties that
were never challenged in court or at the World Trade
Organisation. Instead, by threatening AGOA’s renewal, South
Africa was effectively blackmailed into accepting their products,
as well as reducing our food safety standards to accommodate
their unwillingness to produce products compliant with South
African standards.
- Kevin Lovell, CEO South African Poultry Association
The Star, 17 June 2016
65 000 tons of USA bone-in chicken can now be dumped into South Africa
Imports of chicken leg quarters
Source: Stratalyze.com
R9.53 per kg
Is this dumped?
8 130 tons
Trade remedies can still be brought against the USA
• A high standard of conduct will be required
• The USA anti-dumping duties on chicken is not WTO compliant
• USA could not dispute the matter at the WTO without suspending SA’s AGOA benefits
• Suspension of AGOA benefits it an ever-present sword over SA’s head
AGOA poorly utilised
Think export!
Invest in knowledge to gain better access
Clever lobbying for better access
(Better preparation, less aggression)