DA: AGOA-gate – agri job losses on Rob Davies hands

It seems the flood gates are opening up in South Africa as the ministers Jacob Zuma has entrusted in creating jobs and growth are falling in all respects. Malusi Gigaba’s visa-gate cost the travel industry billions and not until last week, was there a u-turn on the policy. Now it’s the trade minister Rob Davies’ turn with AGOA-gate. The United States has given South Africa 60 days before the AGOA suspension comes into effect. This not only threatens R23 billion worth of trade but also the thousands of jobs that comes with it. Yet another stone being laid, as Magnus Heystek said earlier, on the countries path to bankruptcy. – Stuart Lowman 

By Geordin Hill-Lewis*

Late yesterday, US President Barack Obama informed Congress of his intention to suspend South Africa’s AGOA benefits for all agricultural products. This will affect roughly R2.4 billion of annual agricultural exports, covering products such as wine, fruit juice, citrus fruit, pulp and more. The consequences for farmers and farmworkers is profoundly negative- in a year in which they are already suffering the effects of a devastating drought.

Rob_Davies
Rob Davies, South Africa’s Minister of Trade and Industry

The reason this has happened is plain and simple: Minister Rob Davies has had months of warnings and reminders to honour the commitments made to the USA on market access for chicken, pork and beef, but has failed to do so. This mess-up has happened on his watch, and its consequences are entirely on his hands. The loss of AGOA benefits for agricultural products will cost thousands of jobs in the agricultural sector.

This announcement comes just 3 days after Minister Davies told the DTI Portfolio Committee in Parliament that “AGOA is secure” and that South Africa had met all of the commitments made to the US earlier this year. He was clearly misinformed, or was not being completely frank with the Committee.

I have written to the Committee Chairperson today to ask that Minister Davies come back to the Committee urgently to correct his earlier briefing, and to set out his plan to fix this mess. I have also written to the Speaker of the National Assembly (NA), Baleka Mbete, requesting that she schedules a debate of public importance next week, in terms of Rule 103 of Parliament, to debate this suspension, and to give the Minister an opportunity to explain to Parliament and the country exactly how this mess-up happened on his watch.

The negotiations for the renewal of South Africa’s AGOA benefits have been completely mishandled by Minister Rob Davies. For more than a year the DA has warned that the DTI was engaging in a game of high stakes brinkmanship with the US government, deliberately acting in a manner that antagonised the US Trade Representative and Congress. We have missed deadlines, not answered letters, and made commitments only to fail to honour them later.

According to the letter to Congress, the new (higher) tariffs on South Africa’s agricultural exports will only take effect in 60 days (5 January 2016), so South Africa theoretically still has until then to sort out the remaining market access barriers and meet our commitments. Even if we do sort it out by then, the damage done to South Africa’s image and standing as a trade partner of the USA is irreversible. If we do not sort it out by then, more severe restrictions, or total exclusion from AGOA, may well follow.

It is truly infuriating that it has come to this. After months of being warned, reminded, and even begged to take this more seriously, the DTI’s incompetent handling of AGOA has resulted in this suspension.

While 8 million South Africans are unable to find a job, being excluded from a preferential trade agreement with the world’s largest economy is something we simply cannot afford.

*Geordin Hill-Lewis is the Democratic Alliance Shadow Minister of Trade and Industry.

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