1. Update on AGOA Negotiations Minister of Trade and Industry
Dr Rob Davies, MP
Minister of Trade and Industry
07 January 2016

2. Background
The African Growth and Opportunity Act (AGOA), enacted in 2001, is a unilateral trade preferential programme for about tariff lines the US offers to 48 African sub-Saharan countries.
President Obama signed the AGOA Extension & Enhancement Act (AEEA) of 2015 into law on June 29, extending AGOA benefits for 10 years.
South Africa had campaigned successfully for AGOA to be renewed for all sub-Saharan African Countries with our country included.
However, the US lobbies insisted that some issues of interest to them such as poultry, pork and beef needed to be resolved by South Africa to allow SA to be eligible

3. The Paris Deal – 5-6 June, 2015
Agreement was reached on a quota of t/a for import of import of US bone-in chicken pieces, in which anti-dumping duties will be waived.
South Africa reduced demand for exemption of anti-dumping duty from tons to tons.
There will be a growth factor, which will be calculated annually as an average of DAFF verified/supplied production and consumption growth or shrinkage, on the 2015 base line.
As large a percentage as possible of the quota will go to HDI's (to be determined by a consultation process undertaken by DAFF/dti).
The US will support development via investment in training, skills development, new entrants and processing support.

4. Poultry SPS
The US Government has been negotiating a Trade Protocol in the event of any New Outbreaks of Avian Flu – to secure continued exports of poultry from those STATES/Areas in the US that are NOT AFFECTED by Avian Flu.
In addition the US has been negotiating a supporting health certificate for poultry
While strictly not part of the poultry health certificate, the US has insisted on a “side-letter” on Salmonella that clarifies SA’s existing standards and procedures.
After several months of technical discussions by the Vets a Poultry HPAI Trade Protocol and a Poultry Health Certificate has been finalized.
Notes
The “like circumstances test” determines that if foreign investors are not “in like circumstances” in respect of South African investors, then national treatment will not be granted;
This test has its origin in international investment law and has been applied in respect whether certain government measures directed to specific domestic policy objectives can be accessed by any foreign investor. For example, if a tax or rebate system is designed to stimulate the development of domestic small businesses in a particular sector (lets say cut flowers), it stands to reason that a multi-million dollar company that operates in the oil and gas sector cannot come and claim the same rebate or tax treatment.
If the like circumstance test is applied under these circumstances, it would be apparent that the factors assist in determining whether the respective companies are in “like circumstances”. For instance, are the companies in the “same sector, what is the “economic rationale” for such a measure, etc.
The judiciary is the ultimate interpreter of the above mentioned provisions.
In respect of international arbitration, consent from the Republic is required and the exhaustion of local remedies should be demonstrated. The basis of this provision is a Cabinet Decision of 2010 which mandates

5. Beef
On beef, the Cabinet approved the lifting of a ban on boned beef from several countries which had Bovine Spongiform Encephalopathy (BSE) including the United States on the 24th of June, 2015.

6. Pork
On Pork, the Animal Health Authorities of both governments have been undertaking the necessary technical work to ensure safe trade from at least three diseases, namely, Trichinella, Porcine Reproductive & Respiratory Syndrome (PRRS) and Aujesky.
South African vets negotiated a list of pork cuts to ensure safe trade from some potential diseases.

7. Poultry Quota
On 18 December 2015, South Africa through the South Africa Revenue Services and the International Trade Administration Commission published the rebate provision and the guidelines for import of tons of US bone-in chicken pieces into the South African market, in which anti-dumping duties would be exempted.
Technically, SA has met the deadline of December 31st set by President Obama.
Notes
The “like circumstances test” determines that if foreign investors are not “in like circumstances” in respect of South African investors, then national treatment will not be granted;
This test has its origin in international investment law and has been applied in respect whether certain government measures directed to specific domestic policy objectives can be accessed by any foreign investor. For example, if a tax or rebate system is designed to stimulate the development of domestic small businesses in a particular sector (lets say cut flowers), it stands to reason that a multi-million dollar company that operates in the oil and gas sector cannot come and claim the same rebate or tax treatment.
If the like circumstance test is applied under these circumstances, it would be apparent that the factors assist in determining whether the respective companies are in “like circumstances”. For instance, are the companies in the “same sector, what is the “economic rationale” for such a measure, etc.
The judiciary is the ultimate interpreter of the above mentioned provisions.
In respect of international arbitration, consent from the Republic is required and the exhaustion of local remedies should be demonstrated. The basis of this provision is a Cabinet Decision of 2010 which mandates

8. Conclusion of the Negotiations
On 4th of November, President Obama announced a 60 deadline for a possible Suspension of SA's Agriculture benefits...as the technical work on the SPS issues on the 3 Meats had not been concluded.
South Africa's vets have worked throughout the festive period to finalize the negotiations on salmonella and the health certificates on pork and beef.
These negotiations were concluded last evening .. on the 6th of January. US negotiators are happy with the outcome. The signing ceremony took place early today.
Notes
The “like circumstances test” determines that if foreign investors are not “in like circumstances” in respect of South African investors, then national treatment will not be granted;
This test has its origin in international investment law and has been applied in respect whether certain government measures directed to specific domestic policy objectives can be accessed by any foreign investor. For example, if a tax or rebate system is designed to stimulate the development of domestic small businesses in a particular sector (lets say cut flowers), it stands to reason that a multi-million dollar company that operates in the oil and gas sector cannot come and claim the same rebate or tax treatment.
If the like circumstance test is applied under these circumstances, it would be apparent that the factors assist in determining whether the respective companies are in “like circumstances”. For instance, are the companies in the “same sector, what is the “economic rationale” for such a measure, etc.
The judiciary is the ultimate interpreter of the above mentioned provisions.
In respect of international arbitration, consent from the Republic is required and the exhaustion of local remedies should be demonstrated. The basis of this provision is a Cabinet Decision of 2010 which mandates

9. Strengthening and Growth Commercial relations
We can now work to continue to strengthen SA US trade and investment relations which are deepening and robust...more value added trade.. with Mercedez Exports...and more two way investments with Ford and SASOL...
In Agriculture there is huge potential for increasing South Africa's exports into the US market...long list of products waiting for market access..incl. avocados, mangoes, chicken breasts, Karoo Lamb, ...in the Poultry Sector the US has offered to work with DAFF and Dti to provide technical assistance and capacity building for small black poultry farmers...
Notes
The “like circumstances test” determines that if foreign investors are not “in like circumstances” in respect of South African investors, then national treatment will not be granted;
This test has its origin in international investment law and has been applied in respect whether certain government measures directed to specific domestic policy objectives can be accessed by any foreign investor. For example, if a tax or rebate system is designed to stimulate the development of domestic small businesses in a particular sector (lets say cut flowers), it stands to reason that a multi-million dollar company that operates in the oil and gas sector cannot come and claim the same rebate or tax treatment.
If the like circumstance test is applied under these circumstances, it would be apparent that the factors assist in determining whether the respective companies are in “like circumstances”. For instance, are the companies in the “same sector, what is the “economic rationale” for such a measure, etc.
The judiciary is the ultimate interpreter of the above mentioned provisions.
In respect of international arbitration, consent from the Republic is required and the exhaustion of local remedies should be demonstrated. The basis of this provision is a Cabinet Decision of 2010 which mandates

10. Strengthening and Growth Commercial relations, continued
We want to re-iterate our message on AGOA...it is potentially a win-win...mutually beneficial for both SA and US and SA's participation contributes to regional integration.. and it should be retained for next 10 years as part of Obama's Africa legacy..
Notes
The “like circumstances test” determines that if foreign investors are not “in like circumstances” in respect of South African investors, then national treatment will not be granted;
This test has its origin in international investment law and has been applied in respect whether certain government measures directed to specific domestic policy objectives can be accessed by any foreign investor. For example, if a tax or rebate system is designed to stimulate the development of domestic small businesses in a particular sector (lets say cut flowers), it stands to reason that a multi-million dollar company that operates in the oil and gas sector cannot come and claim the same rebate or tax treatment.
If the like circumstance test is applied under these circumstances, it would be apparent that the factors assist in determining whether the respective companies are in “like circumstances”. For instance, are the companies in the “same sector, what is the “economic rationale” for such a measure, etc.
The judiciary is the ultimate interpreter of the above mentioned provisions.
In respect of international arbitration, consent from the Republic is required and the exhaustion of local remedies should be demonstrated. The basis of this provision is a Cabinet Decision of 2010 which mandates

11. SA Benefits under AGOA
Of total SA exports to USA, 38% went under AGOA (including GSP) in 2014.
South Africa’s AGOA (including GSP) exports amounted to US$3.1 billion in 2014.
GSP exports increased from US$1 billion in 2013 to US$1.4 billion in 2014, while AGOA exports declined from US$2.6 billion in 2013 to US$1.8 billion in 2014.
In 2014, major AGOA/GSP-beneficiary sectors were: vehicles, mineral and metals, chemicals, and agricultural products.  

12. What are the benefits of AGOA for South African exporters?
Total tariff revenue that South African exporters are relieved of paying as a consequence of AGOA is $46 884 
The largest beneficiary of this tariff relief is the automobile industry that gained a benefit of $32 678 025.00, in (BMW/MERCEDEZ – Ford)
The second largest beneficiary was the base metals sector that stands to lose $ of benefits under AGOA. (Manganese)
The third largest sector is agriculture sector that was relieved of paying duties amounting to $5  ( tons of Citrus)
The fourth largest sector was the chemical sector that gained $1  (SASOL)
About jobs are created by AGOA in South Africa (TIPS)