Pretoria - US ambassador to South Africa Patrick Gaspard has warned the South African Government that its “unnecessary and unscientific” trade barriers on US food imports are jeopardising the renewal of the vital African Growth and Opportunity Act (Agoa).
The legislation gives duty-free access to the US market for most South African exports. It is up for renewal in the US Congress next year, but US agribusinesses in particular are lobbying hard for South Africa to be cut out of it.
Gaspard also warned that uncertainty over government policies and labour unrest were increasingly threatening foreign investment.
Gaspard, a close confidante of President Barack Obama and a former unionist, was delivering his first policy speech, at Unisa in Pretoria, after arriving in South Africa five months ago. He noted that in 2012 South Africa had exported US$2.1 billion (R23bn) worth of goods to the US under Agoa and that for car manufacturers particularly, Agoa was critical to their decisions to invest in South Africa.
In 2012, South Africa exported 60 000 cars to the US under Agoa.
Gaspard repeated that Obama supported the renewal of Agoa when the current supporting legislation expired next year. But “he needs to be able to show American businesses and Congress that there is a level playing field for trade between the US and South Africa”.
US businesses and legislators were asking “why should we give Agoa privileges to South African companies when US products are prevented from accessing this market”, Gaspard said.
He referred to “unnecessary and unscientific” barriers against US poultry, beef and pork which had inspired a group of 15 major US agricultural associations representing 120 000 farmers and 8 000 agribusinesses to call on Congress last year not to renew Agoa.
Gaspard warned that the loss of Agoa access – plus the volatile labour climate – could further influence car manufacturers to move plants out of South Africa.
US companies had told him that high-profile strikes shutting down entire sectors and industries for long periods, coupled with violence, were discouraging them from risking investment in South Africa.
This would lead to fewer jobs.
Gaspard said his union experience in the US had taught him that the strike should be the worker’s last resort, not the first, “because of its profound impact, in both human and economic terms”.
And some of South Africa’s schemes to create and implement industrial policies had added to the high levels of policy uncertainty for local and foreign investors.
The Investment Promotion and Protection Investment Act, the draft Mineral and Resources Development Act and the Private Security Industry Regulatory Authority Act amendments “represent a potential weakening of the investment climate”.
“ I urge the government to take a close, comprehensive look at the combined effect these bills will have on the investment climate and ask if that is the best way to ensure a broadly shared prosperity,” he said. - Pretoria News