Obama Suspends South Africa From Getting Trade Benefits


Trade Benefits are essential to every developing country. There are several trade benefits underdeveloped countries gets from developed countries. It is crystal clear and evident that the United States of America is the world largest economy and also the largest when it comes to importation and exportation of goods and services. In 2013, U.S exported goods and services worth 2.3 trillion dollars. In the same year, U.S goods and services exports supported an estimated 11.3 million jobs and many more lined up.

President Barack Obama of the United States of America has announced America’s move to suspend South Africa’s duty-free benefits. He made this announcement in Washington on Tuesday. The suspension as announced will be effective from March 15.

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In his speech, the president opined that the move for the suspension was because of South Africa’s failure to meet the requirement of a trade deal. Furthermore, Obama strikingly said

“I have determined that South Africa is not meeting the requirements and that suspending the application of duty-free treatment to certain goods will be more effective in promoting compliance.”

It is pertinent to note that this move could cost South Africa up to seven million dollars. Which analysts believe will not go down well with the economy of the country.

President Obama also pointed out that South Africa had earlier expressed their concern about U.S avian flu that broke out, killing 50 million birds. This was seen as a threat to human and animal health in South Africa and a challenge to South Africa’s  growing economy.

It would be recalled that last week, South Africa’s trade Ministry stated that plans to strike a deal with Washington over farm produce trade was near actualization. With the actualization of such deal, South Africa would retain the benefits of the African Growth And Opportunity Act (AGOA). AGOA is a U.S trade agreement mapped out to lend helping hands to Africa exporters. However, South Africa Trade ministry is yet to respond to the comment.

Following this development, analysts have come up with the idea that this could be a move to pressurize Pretoria to weaken its fist on U.S farm exports restriction, especially poultry products. South Africa before now has restricted some U.S farm exports into the country.

Meanwhile, NKC African Economist Analyst, Bart Stemmet has expressed hope that before the March deadline, a deal would be hopefully struck. “We are confident that the suspension will ultimately be avoided”, he said. He further maintained that Pretoria cannot afford to bear the financial damages of being pushed out from AGOA.

It would also be recalled that one of the criteria for the membership of AGOA is elimination of U.S barriers to trade and investment and that some time last year, the U.S had plans on ground to ban South Africa farm products. However, U.S Trade Representative, Michael Froman opined that if South Africa meets up with the expected requirement, the suspension could still be avoided.

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