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U.S. vows sanctions if South Africa doesn’t lift ban

 

 

By STAN MADDUX

Indiana Correspondent

 

WEST LAFAYETTE, Ind. — President Barack Obama is vowing to impose trade sanctions on South Africa if a ban on U.S poultry and unfairly viewed restrictions on other imported U.S agriculture goods is not lifted.

Chris Hurt, a professor of agricultural economics at Purdue University, is not sure if imports to South Africa have a real measurable financial impact on the U.S. agriculture industry. But if Uncle Sam doesn’t enforce its trade agreements there, the losses would be much greater if other countries get the impression they can violate their trade deals with America and not be punished, he explained.

He also noted there’s been a push by many U.S food producers for the president to intervene. "It’s certainly the principle, and the principle is that we have these agreements and if you don’t ask your trading partners to follow those agreements then it has implications for other trading partners,’’ said Hurt.

Obama on Nov. 5 announced he will suspend South Africa’s right to export farm products to the United States duty-free unless it starts to bring down barriers to American pork, poultry and beef within 60 days. The U.S. says South Africa is in violation of the African Growth and Opportunity Act that originally went into effect in 1999, by blocking U.S. chicken imports with high tariffs for 15 years and using "unwarranted sanitary restrictions" to keep out U.S. pork and beef.

There are also complaints about the tariffs South Africa has placed on U.S. farm good imports and, since December 2014, the country has banned U.S. imports of poultry citing the outbreak of avian influenza. The U.S. ag industry disputes the validity of the reasons given by South Africa for its restrictions, saying they’re excuses, perhaps, for wanting to protect its own food producers from competitive imports.

In June, South Africa and the United States agreed on a framework to resume importing U.S chicken, but missed the Oct. 15 deadline for agreeing to new animal health and food safety rules for imports of U.S. poultry and meat products.

There has been progress toward ending the impasse, generating some optimism about a resolution prior to any sanctions being imposed. But with major differences still to be worked out, agriculture is applauding the president’s get-tough approach.

"Therefore, we strongly support the administration’s actions to hold South Africa accountable for failure to resume the importing of U.S. chicken," said Mike Brown, president of the National Chicken Council. "It makes no sense for the United States to give special preferences to countries that treat our trade unfairly."

At stake for South Africa is the loss of $176 million in exports of agricultural products to the U.S. and potential loss of other benefits estimated at $4 million-$7 million, according to government sources.

Hurt said the stance by the Obama administration is also likely geared toward preserving U.S access to markets throughout the continent of Africa under the existing trade agreement.

It’s predicted that growth in Africa over the next 10 years is going to be among the highest in the world at 5.1 percent annually, while growth in the country of South Africa is expected to be just slightly lower.

Hurt said while average incomes throughout the developing continent are much lower than in the United States, the anticipated rate of future growth means large percentage gains in household incomes and people being able to buy more of expensive foods like beef, pork and poultry.

That’s a demand U.S. food producers would like to help meet and, with China already investing heavily in Africa, it’s in the interest of America to not be left out. "You can’t not be someplace where you’re going to get growth rates of 5 percent a year," Hurt said.

11/18/2015