Trade and Industry Minister Rob Davies. Picture: GCIS
Trade and Industry Minister Rob Davies. Picture: GCIS

South African meat producers could consider litigation against the US if it imposes new tariffs on aluminium-based exports such as vehicles, Trade and Industry Minister Rob Davies said.

Amid a threat of a global trade war, the US and its African counterparts are discussing the African Growth and Opportunity Act (Agoa), a preferential-trade programme that enhances market access to the US for about 40 sub-Saharan nations by eliminating import levies on more than 7,000 products ranging from textiles to manufactured items.

In 2016, SA retained preferential access for its farming goods to the world’s biggest market after meeting benchmarks set by US president Barack Obama to allow the import and sale of US meat products. SA is the largest nonoil-exporting beneficiary under Agoa and the bulk of its shipments under the accord are vehicles and car parts.

SA’s government is concerned that the US is considering a new wave of tariffs that could be extended to the vehicle industry, which is one of the cornerstones of South African manufacturing. In June, the Trump administration imposed a 25% duty on steel and 10% levy on aluminium from the EU, Canada and Mexico, after refusing their calls for permanent exemptions. The US says the tariffs are needed to protect its industry and national security.

"We reminded our US interlocutors that the concessions we made on the three meats — poultry, pork and beef, as a quid pro quo — are linked to our continued benefit from Agoa," Davies said by phone from the US. If the US government spread its focus to SA-made cars, "there could well be a litigation that could challenge our continued offering of that facility to the US, we made that clear," Davies said.

The US government was performing the annual review of the Agoa programme, which had seven years before it expired. It was not clear what would replace it if that were not reviewed, Davies said.

Bloomberg

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