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United States Moves to Punish South Africa, Suspend Trade Benefits Over Farm Export Impasse

( [email protected] ) Nov 06, 2015 07:57 AM EST
The United States moved to suspend trade benefits for South African farm products on Thursday, escalating a drawn-out dispute over U.S. chicken and meat exports.
U.S. President Barack Obama in Newark, New Jersey, November 2, 2015. Reuters

The United States moved to suspend trade benefits for South African farm products on Thursday, escalating a drawn-out dispute over U.S. chicken and meat exports.

U.S. President Barack Obama said he planned to revoke duty-free status for South African agricultural goods in 60 days under a program set up to help African exporters.

"I am taking this step because South Africa continues to impose several longstanding barriers to U.S. trade, including barriers affecting certain U.S. agricultural exports," he said in a letter to Congress.

South African Agriculture Minister Senzeni Zokwana expressed surprise at Obama's move on Friday.

"I am surprised because our veterinarians were meeting with the Americans last week," he said. "They exchanged information. We are waiting for the Americans to respond to the suggestions we have made."

Trade Minister Rob Davies said Pretoria was keen to act to prevent the threatened action.

"We take the letter seriously as a warning that if we don't conclude, this will happen," he told a news conference in Cape Town.

South Africa has banned U.S. poultry imports since last December after an outbreak of bird flu. The measure came on top of 15 years of punitive import duties on some U.S. chicken products.

U.S. Trade Representative Michael Froman said South Africa could still avoid the suspension, which could cost it up to $7 million in lost benefits, if it met benchmarks to eliminate barriers to U.S. poultry, pork, and beef.

The country missed an Oct. 15 deadline to agree on new animal health and food safety rules, which also affect U.S. beef and pork exports, prompting the United States to warn that its eligibility for the African Growth and Opportunity Act (AGOA) trade program was at risk.

Eliminating barriers to U.S. trade and investment is one of the criteria for membership of AGOA, which was renewed earlier this year and provides duty-free access to goods from sub-Saharan African countries, ranging from crude oil to clothing.

"We do not take this decision lightly, and, in fact, have been working hard over many months - indeed years - to help South Africa avoid such action. Unfortunately, the issues persist," Froman said in a statement.

National Chicken Council President Mike Brown backed the move and said it made no sense for the United States to give special preferences to countries that treated it unfairly.

"This should send a clear message to South Africa and their poultry industry that they will not be given a 'Get out of jail free' card every time AGOA rounds the turn," he said.

South Africa exported $176 million in agricultural products to the United States under AGOA in 2014 and potential lost benefits are estimated to total $4 million to $7 million.

Products affected would include oranges, wine, macadamia nuts and edible ice, like sherbert - which normally has a tariff of 17 percent - and citrus juice, U.S. data shows.