Tag Archive | African Growth and Opportunity Act

Plenty in the way of AGOA agreement

Sorting out AGOA agreement by Jan….

Sent to clients 17 Dec…. During a briefing to Parliament, it became evident once again that the SA Cabinet perceives the renewal of the AGOA agreement in the overall context of trade being attached in the future to a development price. The briefing was by DDG Kgabo Mahoai of the Department of International Relations and Cooperation (DIRCO).
Kgabo Mahoai

Whilst the advantages of a signed AGOA agreement to South Africa were great without doubt, Mahoai said, it had to be considered within the overall context of trade between Africa and the rest of the world. He was at pains to express that this was not just South Africa’s view.

AU plans for Africa

The overall African Union theme being developed by African states was clearly confirmed by DIRCO in that as a generalised policy, investment by international companies to gain access to poorer African zones had to be accompanied by reportable programmes of contributions to skills development, education, and small business and towards the upliftment of the African continent in general.   A price, he said, had to be attached for access to the African market.

Hence the Black Industrialists Investment Programme, devised by Department of Trade and Industry (DTI), they said, and whilst US President Barack Obama had given South Africa 60 days until January 4 to show it is meeting the requirements of AGOA before the US imposes normal tariffs on South African agricultural products, the two matters of development and trade were inter-dependent, whatever US senators might feel.

In the background

However, the whole issue is complicated by a third issue, say critics of DTI’s slowness in finalising AGOA, by the passage of the Private Security Industry Bill, held back by President Zuma and appearing to be compounded by national intelligence issues according to MPs. DIRCO said they could not discuss this but it was evident from questioning by MPs that this was “the elephant in the room” when it came to general US-SA trade relationships.

chickenWhilst the debate on AGOA has been complicated by US senators over anti dumping duties that South Africa had imposed on US chicken wings and drumsticks in 2000 – the argument then extending to meat and pork products – the stakes are high since the agricultural section of AGOA (which could be this isolated from AGOA and lose its duty-free status) involves some additional R140m of exports in wine, citrus and nuts, in addition to meat and poultry.

Kick back…

Senior SA MPs across party lines have observed that the position for DTI has also recently radically altered in that drought has seen the necessity to import cheap chicken as a substitute in the absence of red meat to poorer and lower income groups. This has adversely affected the SA position in negotiations.

No doubt, this is the dilemma facing DTI, Minister Rob Davies, having recently stated that “everything had been done which was possible to meet US requirements on certifications issues but did not wish to intervene in matters relating to ongoing veterinarian discussions between the two countries.”

In other words, previous arguments that the “US was bullying smaller countries into trade agreements advantageous to the US” might now have been negated by an additional need for chicken on the local market. Whilst meat is preferred in the average African household, chicken is a relatively cheaper substitute and acceptable, especially chicken wings and drum sticks, the drought in SA having changed the “quid pro quo”.

DTI at the front

DIRCO in their briefing said that they did not wish to make statements to MPs on “DTI territorial areas” but they were assisting where possible to ensure that the AGOA agreement was satisfactorily concluded in all aspects. Also the US, DIRCO was sure, were meeting all “developmental requirements” on general US-SA relationships, both here in the commercial world and on an inter-governmental basis.

DDG Kgabo Mahoai felt confident, he concluded, that AGOA was to be renewed in all aspects despite further late “anti-SA lobbying by some US senators attempting to resuscitate pressure on President Obama.”

Inside job

At this point, the meeting was disrupted by unruly NEHAWU protesters who blew vuvuzelas and sangnehawu freedom songs, disallowing any further debate. Chairperson, Eddie Makue (ANC), wisely concluded the meeting, objecting to protester’s that the disruption was illegal in terms of national law to interrupt parliamentary business. A good number of the NEHAWU demonstrators were in fact parliamentary staff and had full knowledge where meetings were taking place in the parliamentary precinct.

This was a sad conclusion to an intelligent meeting.

Other articles in this category or as background
EU and AGOA still important to SA, says govt – ParlyReportSA
AGOA : Parliament this week 3 Nov 2015 – ParlyReportSA

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AGOA : Parliament this week 3 Nov 2015

cropped-sa-parliament-2.jpg

 

Editorial…….

AGOA : What and who to believe….

Reported to clients 5 November……On June 10 2015, a meeting took place in Parliament between the Department of Trade and Industry (DTI) and the Portfolio Committee on Trade and Industry, chaired by Ms. Joanna Fubbs, during which DTI was reporting back on its progress with B-BBEE.

The meeting was interrupted by the appearance of Faizel Ismail, the special SA Trade Ambassador to thefaisel ismail AGOA talks, who dramatically made an announcement with the Chair’s agreement despite nothing on the agenda, to all members of the Committee. To sum up the statement he said that the negotiations on the AGOA trade agreement could be considered a success. There was considerable joy amongst MPs generally.

Then on September 8, Lionel October, Director General of the Department of Trade and Industry (DTI), surely “Mr. Big” when it comes to knowledge of trade relationships and policy with other countries, made the following rather obtuse statement to the PC on Trade and Industry when asked for the current position with regard to the AGOA.

He answered, “As for SA’s US relationship, no one relationship would save SA. The US has decided to re-industrialise with an emphasis on energy development in Africa after a previous emphasis on the service industry. The AGOA had been reviewed, and meat trade issues needed to be resolved but in general the AGOA had grown in its relationships.”

What this was supposed to mean was difficult to interpret. But then discussions were on-going at the time between SA representatives and the US congress over poultry, meat and pork issues and relationships were admittedly difficult. Dumping by the US was the accusation. Lack of certification of SA exports was the reply. Most were downcast.

The context

The occasion for DG October’s remark was DTI’s presentation of its annual report to Parliament, with Minister Rob Davies present, and it was in answer to an Opposition member on the subject. It was apparent to all at the time that the AGOA had not been mentioned as one of the “achievements” of DTI for the year 2014/5 and the first quarter of the present year. That’s as close as Parliament can get to being up-to-date.

Then newspapers announced that South Africa’s inclusion had been agreed to by Congress and the AGOA Bill had been sent to President Obama for signature. The poultry and meat issue had been resolved apparently.

lionel october 3Everybody relaxed and Lionel October told Parliament in a further PC Trade and Industry meeting, this time on the Protection of Investment Bill, that indeed the Bill had indeed gone for signature and all was done and dusted.

Reverse gear

The we heard from the media, not DTI, that everything is held up again after DTI had admitted under pressure that they had failed to meet a poultry declaration deadline under the AGOA. A war of words started on whose fault that was, DTI claiming that the fault was mutual between the US and South Africa.

In the meanwhile we had put the AGOA behind us, the focus having shifted in the meanwhile to watching the Portfolio Committees of Police and awaiting the return of Private Security Industry Bill, President Zuma staying “mum” on the subject and the Cabinet saying nothing in their regular statements from GCIS.

Clearly the preamble to the AGOA agreement had fallen foul with the US Constitution finding this particular Bill objectionable in terms of international obligations on expropriation, presumably connecting AGOA to US investments in the security sector industry where US owned interests stood to lose control of their investments in South Africa. This time it was the US media reporting, not the negotiating parties.

Just recently, Ms. Joanna Fubbs, chairperson of the Trade and Industry Committee, refused Oppositionjoan fubbs members the right to discuss the issue of the Private Security Industry Bill in her Committee, stating that the subject matter was the domain of another Committee. The subject at the time was the Protection of Investment Bill, now passed at committee level, and whether this Bill would contribute further to poor US relationships, as was apparent with the Security Industry Bill already.

 Passing the cushion

But that was not the full truth. The PC Committee on Police, as far as we can establish, has never discussed in depth the implications of the Private Security Industry Bill as far as the AGOA is concerned. Meanwhile President Zuma, who had the Bill and still has, must be perfectly aware of the implications as must the whole Cabinet, since it is not just the poultry industry that is affected but the security industry, the automotive industry and a whole lot more.

This is especially in the light of the fact that, according to reports, this Bill has been mentioned in Congress in front of the SA Ambassador called to Congress to answer on the subject. Nobody knows therefore, if Parliament will again verbalise on the Bill because nobody will come clean on why the Private Security Industry Bill is stuck where it is in the Presidential office.

 AGOA vs Security Bill

Is AGOA on the altar of ideology, one must ask therefore.

courtesy iol

courtesy iol

During a very recent briefing to the PC on Trade and Industry on AGOA progress, Minister Davies told parliamentarians that everything “was in the hands of veterinarians, both on the US side and in South Africa, both parties taking the issues of animal disease and sickness very seriously“. He continued, “It has been more than we dare do in DTI to interfere or intervene in this process. It is supposed to be an independent process. Avian ‘flu in the US is a repeating disease but, however, all is now resolved from an SA perspective.”

The Minister added, “Furthermore on our side we, the Department of Agriculture and Fisheries and their veterinarians have written to the US side to say we are ready to implement all conditions so President Obama can sign. All the deals are done in both the US and SA industries and we just await the US response”, he concluded with Faizel Ismail present.

Dave MacPherson (DA) pointed to the fact that the whole of AGOA would be torpedoed anyway if the Private Security Industry Bill were to go through. Minister Davies responded that the Private Security had not come up once in the AGOA talks with the US. “Too much of this has been a media debate”, he said.

Under pressure

Consequently Minister Davies is fully aware the situation but dealing with the issues as if they were not connected, which could be considered slightly disingenuous. It is known that Minister Davies very much wants the AGOA deal signed but Oppositions members conclude, when asked, that they also cannot think of a single reason for pushing through the Private Security Industry Bill if it is at the expense of the AGOA and growth.

Unless it can be put down to disharmony within the Cabinet or intransigence on the part of the Minister of Police, they say.

As for the future of the AGOA then, for the moment don’t hold your breath but rather cross your fingers that Cabinet as a whole will come out of its ideological bubble, if this is the case.

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Clinton says it should be easier to do business in Africa

US Secretary of State Hillary Clinton, when addressing the African Growth and Opportunity Act Forum, pointed to the need for infrastructure development in Africa generally, stating that she continually heard from counterparts and business people that to do business in the region is much harder than it should be because the right infrastructure is still not in place.

Marking Global Economic Statecraft Day One, she said by infrastructure she was firstly referring to physical infrastructure needs such as roads, ports, modern power grids but also to “regulatory infrastructure and how easy it is or not to register a new business or get a construction permit.”

She emphasised how important it was for each country in the region to acknowledge the importance of “regulatory infrastructure” as well as the physical infrastructure aspect and whilst “everybody wants roads”, some countries “were now taking a hard look at corruption, for example, that impedes healthy trade and investment”.

Secretary Clinton also noted that some countries in Africa are making key investments in regional infrastructure as well as building regional transportation corridors to promote more economic integration amongst neighbours, “since there is so much more potential for the people of Africa to trade and invest more with each other”.

Earlier this year, US foreign affairs led an energy trade mission to four countries in Africa to identify ways that the USA can help improve the power supply, since lack of reasonably priced, reliable power is a significant constraint on economic growth, she added.

Secretary Clinton said that energy and infrastructure were intertwined and everybody “had to keep the momentum going.”

 

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