South African business people have expressed concern that millions of rands of agricultural exports and over 100 000 jobs could potentially be lost, should South Africa’s inclusion in the Africa Growth and Opportunity Act (Agoa) fall through.
This follow’s US president Barack Obama’s ultimatum, expressed in a letter to president Jacob Zuma last week, warning that South Africa had until January 4 next year to show that it was meeting Agoa requirements before he imposed tariffs on South African agricultural products.
Beverley Schäfer, Democratic Alliance (DA) spokesperson for economic opportunities, tourism and agriculture was cited by daily online news site, Fin24, as saying that a total of 85 000 jobs in SA's citrus farming sector could be at risk. "Missing this trade opportunity will have a damning impact on our regional economy," she said.
The South African Chamber of Commerce and Industry’s (Sacci) Peggy Drodskie said in a statement: “While it appears that it is not intended to exclude South Africa as a whole, the fact that agricultural products such as oranges, wine, macadamia nuts and citrus juice would be targeted, will nevertheless have a hugely damaging impact on the trade balance between South Africa and the United States (US).”
According to her, the value of exports of these products is in the region of R140 to R150 million per annum. “The loss of this revenue to the country, and the impact that it could have on agriculture is therefore significant,” said Drodskie.
Sacci has appealed to government to engage the US and reach an agreement on meeting the benchmarks to eliminate the barriers to US poultry, pork and beef within this timeframe. “This will avoid the more severe penalties that would otherwise be imposed,” Drodskie pointed out.
Other SA leaders, including many of the trade unions, believe that to give into what they say are “bullying tactics” by the US, would be disastrous for SA in the long-run.
IOL news quoted Peter Draper, managing director at Tutwa Consulting, as saying that the US’s use of strong-arm tactics signified a new level of estrangement between the two countries. “Even if this issue goes away, the US would still keep South Africa on a short leash,” he said.
Draper reportedly said it was possible that ultimately the US – which offered extensive farm subsidies, where SA has none - could dump poultry in South Africa. This constituted unfair competition. “If you allow it, it could be catastrophic to the marketplace,” he added.
