AGOA mess is on Davies’s hands

Poultry on sale. Picture: Simphiwe Mbokazi

Poultry on sale. Picture: Simphiwe Mbokazi

Published Nov 9, 2015

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For many South Africans, the first time they’d ever heard of the African Growth on Opportunity Act (Agoa) was on Thursday, when the news broke that US President Barack Obama had informed Congress of his intention to suspend our “Agoa” benefits for all agricultural products.

While they may not have heard of it until now, our Agoa benefits affect the lives of hundreds of thousands of South Africans, and its loss would be devastating for them and for our country.

The comment on Obama’s letter has veered between a sensible appraisal of Agoa’s immense value to our economy, and a kind of naive nationalism of the “we don’t need America” sort.

The truth is: we do need Agoa. It is a one-way system of significant trade benefits, which offers duty free access for South African products to the world’s biggest economy. Simply put, we get a fantastic deal out of it. Tens of thousands of local jobs depend on our preferential access to the US market – jobs on farms, in factories, and in mines – exactly the kind we need millions more of. So when Agoa came up for renewal in the US Congress last year, it was important that our government took ownership of the process to ensure that its renewal was secured. And yet here we are, facing suspension from Agoa for all our agricultural products – placing at risk R2.4 billion in annual exports, and the livelihoods of thousands of farm workers.

Why has the Department of Trade and Industry (dti), and Minister Rob Davies, allowed this to happen? How did it come to this? The reason is plain and simple: Minister Davies has had months of warnings and reminders to honour the commitments made to the US on market access for comparatively small quantities of chicken, pork and beef, but has failed to do so.

The word is that letters were not answered, calls not returned, and promises not kept. US vice-president Joe Biden even called President Zuma to ask him to intervene to ensure deadlines were met. But they were not. This mess-up has happened on Davies’ watch, and its consequences are entirely on his hands.

According to the letter to Congress, the new (higher) tariffs on our agricultural exports will only take effect in 60 days (January 5, 2016), so we theoretically still have until then to sort out the remaining market access barriers and meet our commitments. Even if we do sort it out, the damage done to South Africa’s image and standing as a trade partner of the US is irreversible. If we do not sort it out by then, more severe restrictions, or total exclusion from Agoa, may well follow.

Technical issues

Davies has argued that the few remaining obstacles to an agreement are all technical and sanitary issues, and should be concluded well within the 60 day final deadline. I sincerely hope he is right. It is also obviously true that the negotiating team of veterinarians cannot put the health of South Africans at risk by accepting sub-standard meat products.

However, there is truly no excuse for the length of time the negotiations have taken, or for not meeting mutually agreed deadlines. On this score, he cannot shift blame. He is the trade minister, and is ultimately responsible for South Africa’s good standing as a global trade partner. In a comment that revealed what must be an acknowledgement of responsibility, Davies said on Friday that if President Zuma wanted to fire him, he would go without a fight.

On Friday, I wrote to the Speaker of the National Assembly asking her to schedule a special debate of national importance next week, to debate this matter, and to give the minister an opportunity to explain to Parliament and the country exactly how this mess-up happened on his watch.

It is truly infuriating that it has come to this. After months of being warned, reminded, and even begged to take this more seriously, the dti’s incompetent handling of Agoa has resulted in this looming suspension. While 8 million South Africans are unable to find a job, being excluded from a preferential trade agreement with the world’s largest economy is something we simply cannot afford.

* Geordin Hill-Lewis MP is the DA’s spokesman for trade and industry.

** The views expressed here do not necessarily reflect those of Independent Media.

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