AGOA: Shocking, one-sided deal

Udo W Froese Correspondent
President Barack Obama, as head-of-state and commander-in-chief of the armed forces of the United States of America and his team for the “African Growth And Opportunity Act (AGOA)”, gave sovereign South Africa until March 15, 2016 to comply with Washington’s export of poultry as well as other meats.

In the meantime, the first batch of 325 tonnes of American brown chicken pieces has already hit South Africa’s supermarkets!

If South Africa would not abide by the AGOA-dictate of the White House, the country would be suspended from duty-free treatment to all AGOA eligible goods in the agricultural sector, meaning South Africa would not be able to trade on the American market.

The obvious question is, why would a US president get involved in a project to export chickens to South Africa with a total weight of 65 000 tonnes annually?

It is BRICS, the new economic order of Brazil, Russia, India, China and South Africa. Observing the obvious, it is Washington’s arm-twisting foreign politics. AGOA is their law.

The White House’s discontent with South Africa’s move closer to China and Russia through its BRICS membership, as well as South Africa’s plan to cap foreign ownership in the security companies from mainly the US and the UK, are the real thorns in Obama and Cameron’s side. The chief executive officer of South Africa’s Poultry Association (SAPA), Kevin Lovell, explained that there was a clash between Washington and South Africa since the AGOA status came up for review at the beginning of this year 2016.

Lovell warned that building whole industries on AGOA would be dangerous, because it is a concession and not a trade agreement. South Africa’s industries are aware that the concession could be taken away from them at any time.

Washington’s foreign

politics at its worst

From the onset, the White House threatened that South Africa would lose its benefits if it did not remove its anti-dumping duties on US poultry imports.

South Africa’s trade delegation consulted with the World Trade Organisation (WTO) on fair legal trade structures, which would have made America’s chicken imports more expensive. Washington’s “negotiating” team knew that it was not allowed to dump its brown poultry pieces for much longer.

When US-AGOA came up for renewal in 2014, brown poultry pieces became one of the strong negotiation tools. In addition, Washington’s trade team would invest in the development of new, indigenous black African entrants in the poultry industry. What they forgot to mention is, there are no indigenous black Africans who own a poultry-import business. It is the existing meat importers who benefit.

America’s cost-recovery is from the white poultry meat, not the brown on the bone. When Washington exported its chickens to Ghana, prices were fixed so low that Ghana’s poultry industry collapsed and never recovered since. However, the prices for the imported chicken pieces from America escalated then.

Meanwhile, there was an outbreak of two types of poultry diseases in America, namely Avian Influenza and Salmonella. The outbreak of Avian Influenza hit America’s poultry industry in 2014 as well as in 2015. Standard procedure is that trade would be suspended and all exports halted when there is an outbreak of such diseases. Before trading of poultry would be resumed, the diseases would have to be proven to be cleaned out and destroyed completely.

The International Organisation for Animal Health (OIE) has strict guidelines when a country, any country, can be declared free from disease. This has to be followed by a period of three months after cleaning and disinfecting to the last of infected farms and before exporting.

Washington’s creative power-arm-twisting through Agoa

Capitol Hill tried to force South Africa during the active outbreak of the Avian Influenza to accept a “regionalisation protocol”. It means Washington tried to dictate to South Africa to accept the different US states as “regions” and accept their chickens. Those “regions” would not be affected by an outbreak of Avian Influenza. It also means that South Africa should accept the poultry from those states/”regions”.

However, geographic states being declared “regions” is not good enough. A sovereign South Africa considers whole countries in its trade relations, not parts of them.

In fact, the latest outbreak of Avian Influenza in America’s poultry-production industry spread so fast from one state to the next that it spun out of control. Washington had its own way out again. A method called “compartmentalisation” was brought to the negotiation table. “Compartments” were negotiated during peace times.

Countries would agree to accept “compartments” to enable movement of breeding stock. South Africa agreed with AVIAGEN to work with their operations as a “compartment”.

It is claimed that “compartments” are better for the control of diseases such as Avian Influenza, which is spread by wild birds. “Compartments” are under a central control system from beginning to end. It should mean that therefore, health risks are minimal. But, regions have many different operations, which are not linked with one another and do not fall under the same management.

When Washington insisted on South Africa to accept their regions, South Africa’s Veterinary Services requested more information to evaluate the risks, as crucial information seemed to have been withheld i.e. the American poultry producers declared themselves free from Avian Influenza H5N8.

Meanwhile, American poultry producers had an additional outbreak of H5N2, but did not declare it to the OIE. As American poultry producers declared themselves free from H5N8, there existed infected backyard flocks being cleaned up.

In January 2016, a new outbreak of Avian Influenza was reported in America. Under normal circumstances, it would have resulted in the complete suspension of agricultural trade in general. But, it is not the case. If that batch lands in South Africa, this country’s national poultry industry would be put under severe health risk, as Avian Influenza would spread to the local poultry industry. Another major health risk also seems to raise its evil head, Salmonella Enteritidis. This avian disease will affect and kill humans in South Africa and the SADC region.

South Africa has a protocol for monitoring all imported meat and meat products for Salmonella. Sampling and testing of shipments at the country’s ports of entry apply to everyone.

Washington, however, wants its products to be tested only for monitoring, but not for typing to establish what type of salmonella it might be.

This writer was told that Washington rejected any form of typing and subjection to heat treatment of its poultry exports. South Africa was not given the option to reject landed, Salmonella-infected poultry. And, South Africa cannot return shipments despite proof of disease. The above-mentioned sanitary problems entered the negotiations at a later stage. South Africa’s poultry industry was involved during the negotiations of the annual tonnage, but not in the sanitary discussions.

South Africa succumbed to Washington’s agoa politics

The South African authorities and their affiliated structures accepted and signed Washington’s “regionalisation protocol”, despite the above-mentioned discrepancies.

South Africa’s Veterinary Association tried to clear matters up. However, it was unsuccessful. AGOA was signed.

The White House-Agoa- dictate further undermines

South Africa’s trade laws

By yielding to Washington’s AGOA dictate, South Africa opened itself up to abolish the basis of working trade laws. Cases upon cases will come up to enforce the abuse of South Africa’s trade laws, as it cannot discriminate between trading partners. What’s good for the goose is good for the gander.

Referring to AGOA, the South African Poultry Association’s CEO, Kevin Lovell explained to members of the media, “We knew it would hurt our industry, but realised that we had to come to an agreement for the greater good of South Africa.”

Meanwhile, the AGOA status remains under threat, despite the signed agreement in place. Is this not a food war against BRICS member, South Africa? It is insane.

South Africa’s civil society needs to take immediate action, alerting consumers nationwide of possibly contaminated poultry imports. AGOA is a shocking, one-sided deal.

Udo W Froese is a non-institutionalised, independent political- and socio-economic analyst and published columnist, based in Johannesburg, South Africa.

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