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South Africa keeps U.S. duty-free access after trade dispute

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South Africa keeps U.S. duty-free access after trade dispute

South Africa keeps U.S. duty-free access after trade dispute
Photo credit: AP

South Africa will retain preferential access for its farming goods to the world’s biggest market after meeting benchmarks set by President Barack Obama to allow the import and sale of U.S. meat products.

“I have determined that suspending the application of duty-free treatment to certain goods is no longer necessary to promote compliance by South Africa with such requirements,” Obama said on Monday in a proclamation.

Obama said in January the U.S. would suspend South Africa’s preferential access for agricultural products under the African Growth and Opportunity Act if it failed to implement an agreement with the U.S. on meat trade. The deal included that U.S. bone-in chicken pieces can be sold in South Africa without anti-dumping duties.

South Africa has been under pressure to open its market to American meat in order to retain benefits under AGOA, as the act is known, which favors 39 African nations by eliminating import levies on more than 7,000 products ranging from textiles to manufactured items. The government published regulations in December allowing for an annual quota of 65,000 metric tons of poultry from the U.S. The first shipment arrived at the port of Durban on Feb. 19, the USA Poultry & Egg Export Council said Feb. 29.

“South Africa has met the benchmarks that we’ve set forth and they’ve taken the needed steps to make American poultry, pork and beef available to consumers in South Africa,” U.S. Trade Representative Michael Froman told reporters on a conference call on March 2. “The removal of these barriers could mean an additional $160 million of exports from the U.S. each year.”

To remain beneficiaries of AGOA, countries are required to cut barriers to U.S. trade and investment, operate a market-based economy, protect workers’ rights and implement economic policies to reduce poverty.

Shipments of farming goods worth $154 million made up about 14 percent of South African exports to the U.S. under AGOA in the first nine months of 2015, according to data from the Trade Law Centre, based in Stellenbosch, near Cape Town. The nation is the largest non-oil-exporting beneficiary under AGOA and the bulk of its shipments under the accord are vehicles and car parts.

Losing AGOA access would have hurt the nation’s citrus, nut and wine industries, associations for the products said in January.


Presidential Proclamation – To Take Certain Actions Under the African Growth and Opportunity Act

March 14, 2016

  1. In Proclamation 7350 of October 2, 2000, the President designated the Republic of South Africa (South Africa) as a beneficiary sub-Saharan African country for purposes of section 506A(a)(1) of the Trade Act of 1974 (the “1974 Act”) (19 U.S.C. 2466a(a)(1)), as added by section 111(a) of the African Growth and Opportunity Act (title I of Public Law 106-200) (AGOA).

  2. Sections 506A(d)(4)(C) (19 U.S.C. 2466a(d)(4)(C)) and 506A(c)(1) (19 U.S.C. 2466a(c)(1)) of the 1974 Act authorize the President to suspend the application of duty-free treatment provided for any article described in section 506A(b)(1) of the 1974 Act (19 U.S.C. 2466a(b)(1)) or 19 U.S.C. 3721 with respect to a beneficiary sub-Saharan African country if he determines that the beneficiary country is not meeting the requirements described in section 506A(a)(1) of the 1974 Act and that suspending such duty-free treatment would be more effective in promoting compliance by the country with those requirements than terminating the designation of the country as a beneficiary sub-Saharan African country for purposes of section 506A of the 1974 Act.

  3. In Proclamation 9388 of January 11, 2016, pursuant to section 506A(c)(1) of the 1974 Act, I determined that South Africa was not meeting the requirements described in section 506A(a)(1) of the 1974 Act and that suspending the application of duty-free treatment to certain goods would be more effective in promoting compliance by South Africa with such requirements than terminating the designation of South Africa as a beneficiary sub-Saharan African country. Thus, pursuant to section 506A(c)(1) of the 1974 Act, I suspended the application of duty-free treatment for all AGOA-eligible goods in the agricultural sector from South Africa for purposes of section 506A of the 1974 Act, effective on March 15, 2016.

  4. Pursuant to section 506A of the 1974 Act, based on actions that the Government of South Africa has taken to come into compliance with the requirements described in section 506A(a)(1) of the 1974 Act, I have determined that suspending the application of duty-free treatment to certain goods is no longer necessary to promote compliance by South Africa with such requirements.

NOW, THEREFORE, I, BARACK OBAMA, President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States of America, including but not limited to sections 506A(d)(4)(C) and 506A(c)(1) of the 1974 Act, do proclaim that:

(1) Proclamation 9388 of January 11, 2016, is hereby revoked.

(2) Any provisions of previous proclamations and Executive Orders that are inconsistent with the actions taken in this proclamation are superseded to the extent of such inconsistency.

IN WITNESS WHEREOF, I have hereunto set my hand this fourteenth day of March, in the year of our Lord two thousand sixteen, and of the Independence of the United States of America the two hundred and fortieth.

BARACK OBAMA

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