Roundup: S. Africa reaches trade deal with U.S., averting sanctions

South Africa has reached a trade deal with the United States, thus allowing Pretoria to continue participation in the African Growth and Opportunity Act (AGOA), it was announced on Thursday.

Negotiations between South Africa and the U.S. about AGOA were concluded on Wednesday, Minister of Trade and Industry Rob Davies told reporters at press briefing in Pretoria.

"We are expecting that South Africa will participate in AGOA," he said.

Under the deal, South African will import 65,000 tonnes of U.S. poultry a year, Davies said.

"With regard to pork, South Africa has agreed to permit the unrestricted importation of the shoulder cuts after the U.S. agreed to apply mitigation measures," said Davies.

"On beef, South Africa had already agreed to import beef from the U.S.," he said.

In return, South African agricultural products will continue to enjoy trade preferences for quota and duty-free entry into the U.S., according to the minister.

Davies said the U.S. has signed all documents surrounding the health issues and he is now awaiting formal indication that the agreement has been concluded.

Referring to time differences between South Africa and the U.S., he said South Africa is awaiting formal sign-off from the U.S..

"We are expecting that SA will now be able to participate in Agoa without any interruptions in trade flows," the minister said.

In November last year, U.S. President Barack Obama set December 31 as the deadline for South Africa to conclude the negotiations on opening its markets to poultry, pork and beef from the U.S.. He threatened that South Africa would face the risk of losing AGOA if if failed to meet the deadline.

The two sides allowed negotiations to continue for some more days to resolve outstanding technical issues, particularly highly pathogenic avian influenza and salmonella.

Soon after negotiations were concluded, South Africa began opening its market to U.S. poultry products from 11:30 Thursday morning, Davies said.

South African had blocked chicken imports from the U.S. because of outbreaks of avian flu in parts of the U.S. and because of concerns about salmonella infection. It has also been citing concerns about diseases in pork and beef to block imports of those products.

South Africa exported 176 million dollars worth of agricultural products to the U.S. last year, mainly citrus and wine. South Africa's total exports amount to 70 billion rand (4.5 billion dollars) and of these, 25 million rand (about 1.6 billion dollars) are to the U.S. market.

South Africa has allowed virtually no U.S. chicken, pork or beef imports into the local market for several years, partly through anti-dumping duties and partly through health restrictions.

In June this year officials from both sides agreed partly to lift the anti-dumping duties on U.S. chicken imports, to allow a quota of 65,000 tons a year to be imported. This would be subject to several conditions being met. But virtually chicken imports were not allowed into the South Africa market because of outbreaks of avian flu in parts of the U.S. and because of concerns about salmonella infection.

Although the U.S. renewed the AGOA for another decade in July last year, Washington said South Africa's participation in AGOA had to undergo out-of-cycle review.

The AGOA, a legislation that was approved by the U.S. Congress in May 2000, is to assist the economies of Sub-Saharan Africa and to improve economic relations between the U.S. and the region. The Act provides trade preferences for quota and duty-free entry into the U.S. for certain goods, under certain conditions. Enditem