Despite a previous announcement by the Department of Trade and Industry that the US African Growth and Opportunity Act (AGOA) negotiations had been completed successfully, President Barack Obama of the United States (US) has announced the possible suspension of South Africa from AGOA.
According to a statement released by the White House on 11 January 2016, if South Africa does not comply with requirements laid out by AGOA, they will be suspended effective of 15 March 2016.
“I have determined that South Africa is 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. Accordingly, I have decided to suspend 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,” said Obama.
The history
However, this is not the first time that the US has threatened to suspend South Africa from AGOA. South Africa failed to meet the 31 December 2015 deadline to remove barriers to US meat imports. After allowing this deadline to pass by without making the requested changes, the US announced its intention to withdraw South Africa from AGOA.
The latest announcement by Obama comes almost a week after the Minister for Trade and Industry Rob Davies stated that the negotiations had been successful and that South Africa was awaiting formal endorsement from the relevant US authorities.
If an agreement is not reached between South Africa and the US by 15 March, the South African agricultural sector will no longer enjoy the duty-free treatment that it received under AGOA. This could have an impact on the local agricultural sector.
For more information on the previous disagreement between the US and South Africa on AGOA, click here.