South Africa preventing U.S suspension of trade agreement

South Africa is holding urgent discussions to prevent a U.S suspension on part of a trade agreement…

South Africa is holding urgent discussions to prevent a U.S suspension on part of a trade agreement between the two countries, which provides and important boost to South Africa's economy.

On June 8, 2015, a settlement was reached in the longstanding poultry dispute between the United States and South Africa. Having resolved this, the U.S allowed South Africa to export citrus products tariff-free.

Since the settlement was reached, South Africa has been slow to fulfil the obligations agreed in Paris.

President Barack Obama, on Thursday, notified South Africa about the 60-day suspension for South Africa to meet its commitments to the settlement made in June, or face paying tariffs on its exports to the US of citrus products, macadamia nuts and wine. South African agricultural exports would be excluded from benefiting from the African Growth and Opportunity Act.

U.S senators said “It is unfortunate that this action must be taken, but South Africa has repeatedly failed to implement the deal reached this summer and missed a key deadline last month to finalize the trade protocol and health certificate. There is still time to address these issues."

This would be welcomed by KwaZulu-Natal citrus growers, who would feel a ripple effect from the US threat to suspend trade benefits to the country. “Obviously we are disappointed that the issues have not been resolved, but we do understand that the two governments are continuing in their efforts to reach a solution.” said Justin Chadwick, the chief executive of the Citrus Growers’ Association of SA. Citrus growers in the Western and Northern Cape export to the US, while no citrus products are sent to the US from KZN.

Of the 39 African countries covered by the trade agreement, South Africa exports the most manufactured products to the United States. Last year, Americans bought South African agricultural products worth $250 million, according to the U.S. Embassy. Fruit, vegetables, wine and tree nuts were all imported duty free under the agreement.

Derek Donkin, the chief executive of the Sub-Tropical Growers Association, which manages the Southern African Macademia Nut Growers’ Association, said: “The import duty we would have to pay would not stop trade. In terms of the overall harvest, an estimated 25% goes to the US.”