US-South African agricultural trade hangs in the balance

AP News
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Posted: Nov 06, 2015 9:06 AM

JOHANNESBURG (AP) — South Africa is holding urgent discussions in an attempt to avert a U.S. suspension of part of a trade agreement between the two countries that provides an important boost to this nation's economy, officials said on Friday.

President Barack Obama on Thursday notified South Africa about the suspension. South African agricultural exports would be excluded from benefiting from the African Growth and Opportunity Act because the southern African nation continues to bar American agricultural products, Obama said in a letter.

"We take the letter seriously as a warning," said Rob Davies, South Africa's minister of trade and industry.

The two countries are at odds over the health and safety standards of chicken, beef and pork products, said Davies. Veterinary authorities will meet immediately in order to reach a consensus, he told a news conference in Cape Town.

Davies assured journalists that his department and their American counterparts are "tantalizingly close" to reaching an agreement.

Of the 39 of 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.

About 600 American companies operating in South Africa employ 200,000 people.

The African Growth and Opportunity Act, passed in 2000, gives sub-Saharan countries access to the U.S. market while offering incentives to American companies operating in these countries.