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Fact Sheet: Obama Administration Actions Open South African Market to U.S. Agriculture
Out-of-Cycle Review of South Africa Under AGOA Leads to Breaking Down Barriers to U.S. Poultry, Pork, and Beef
Washington, D.C. – The United States and South Africa have negotiated the removal of long-standing barriers to U.S. agricultural products entering South Africa, following intensive engagement under the new out-of-cycle review mechanism of the African Growth and Opportunity Act (AGOA).
The removal of these unfair barriers opens the door for American poultry, pork, and beef to be available to consumers in South Africa; delivering real value for American farmers.
To be eligible for benefits under AGOA, beneficiary countries must be making continual progress towards eliminating barriers to trade and investment with the United States. On November 5, 2015, President Obama indicated to Congress and the South African government that South Africa was failing to meet this criteria and that he intended to suspend duty-free treatment for all AGOA-eligible agricultural goods from South Africa after 60 days. The United States nonetheless continued to work with South Africa to resolve the key issues relating to market access for poultry, pork, and beef. Those issues have now been resolved by South Africa. These successful enforcement efforts are the latest example of the President’s commitment to holding our trading partners to their commitments.
“Today, both the United States and South Africa have achieved significant wins,” said Ambassador Michael Froman. “American farmers have access to an important market from which many have been shut out for more than a decade. And, on the other side, South African consumers will be able to buy and enjoy high-quality American agricultural products, and historically disadvantaged poultry farmers will receive technical assistance from the U.S. poultry industry. We have also strengthened our relationship with South Africa; proving that we can work together to resolve longstanding issues, which is important to businesses and workers on both continents. And we have shown, once again, the priority the Obama Administration places on enforcing obligations under our international arrangements, to ensure that American exporters can compete fairly around the globe.”
BACKGROUND & ECONOMIC IMPACT
South Africa maintained several long-standing barriers to U.S. agricultural exports. Exports of U.S. bone-in chicken were effectively excluded from the South African market for 15 years due to a range of trade barriers and other measures. Likewise, exports of U.S. pork and beef were blocked from the South African market for several years due to unwarranted sanitary restrictions. In response to these and other concerns, Congress mandated in the Trade Preferences Extension Act of 2015 (TPEA) that the Administration initiate an out-of-cycle review of South Africa’s eligibility for AGOA benefits, in particular of the requirement that beneficiary countries be making continual progress towards eliminating barriers to U.S. trade and investment. This review was initiated on July 21, 2015. In the context of this review, South Africa committed to benchmarks on poultry, pork, and beef that it would need to meet in order to demonstrate compliance with AGOA’s eligibility requirements.
On November 5, 2015, the President determined that South Africa had not met these benchmarks, and notified Congress and South Africa of his intent to suspend South Africa’s AGOA benefits in the agricultural sector for failure to meet the AGOA eligibility requirements.
Although South Africa made progress certain benchmarks in the following month, it did not meet all of them. Thus, on January 11, 2016, the President issued a proclamation suspending South Africa’s agricultural products under AGOA, with an effective date of March 15, 2016. The delayed suspension provided additional time for American poultry to enter into commerce in South Africa, which was the last major benchmark, as well as an opportunity to finalize needed documents for shipments of pork. On February 29, 2016, American poultry entered South African commerce, and on March 1, 2016, the remaining benchmarks were met with regard to U.S. pork. As a result, South Africa has now met all the agreed-upon benchmarks for U.S. poultry, pork, and beef to demonstrate its compliance with AGOA eligibility requirements. The President will now make a determination regarding revocation of the earlier proclamation on South Africa’s AGOA eligibility. The United States will continue to monitor South Africa’s compliance under AGOA and looks forward to South Africa implementing the agreements made regarding entry of U.S. poultry, pork and beef into the South African market.
With the removal of South Africa’s barriers to exports of U.S. poultry, pork, and beef, U.S. exports of these products could reach up to $160 million annually. Annual exports of U.S. poultry to South Africa could reach $100 million, exports of U.S. pork $40 million, and exports of U.S. beef $17 million.