US President Barack Obama threatened to remove certain agricultural products from the African Growth and Opportunity Act (AGOA) trade benefits deal unless South Africa resolves the dispute over the US meat imports. Loss of AGOA benefits could cost thousands of jobs and place hundreds of millions of rand in export revenue at risk.
The dispute involves US meat farmers’ demands that South Africa remove trade restrictions imposed to protect the local industry from cheaper imports. Peter Draper, the managing director at Tutwa Consulting, said that if South Africa allows trade restriction removal, it would be catastrophic to the marketplace.
However, the loss of export revenue on agricultural products if SA’s AGOA privileges are revoked will total R140 million and R150 million per annum. The SA Chamber of Commerce and Industry (SACCI) said that although the US didn’t intend to exclude South Africa as a whole, the targeting of agricultural products would have a damaging impact on the trade balance between SA and the US.