South Africa has yet to finalise a trade agreement with the US, but cabinet has approved a revised offer for a deal in an effort to reduce the 30% tariff rate imposed on local goods. The new offer, which will be submitted to the US on Tuesday, expands on the framework agreement tabled in May this year, and forms the basis for ongoing negotiations to conclude an agreement.
By Michelle van der Spuy, senior journalist at African Farming and Landbouweekblad
The details of the new offer could not be disclosed until an agreement had been reached with the US, said Parks Tau, the minister of Industry and Competition, in a joint media briefing with John Steenhuisen, the Minister of Agriculture, on Tuesday morning.
Trade Concessions on Chicken and Blueberries
Tau confirmed that South Africa has granted market access to US chicken meat under the conditional self-ban system, allowing the country to fully utilise its 72 000-tonne chicken meat export quota agreed upon in 2016.
Steenhuisen explained that the use of the self-ban system was in response to US concerns that South Africa was employing non-trade barriers to restrict US chicken meat imports.
“This issue was raised strongly by the US trade representative, and has come up repeatedly in our interactions with the United States,” he said. “I believe that the self-ban and the self-lift programme we have offered alleviate any concerns that avian flu could be used as a trade barrier, preventing the US from reaching its designated quota in South Africa. I think this is a fair system that adequately addresses those concerns.”
Highly contagious bird flu has been reported in all US states where chicken meat is produced. Since last year, it has also affected dairy cattle, cats and humans in the US. Consequently, the South African Poultry Association opposes this concession, fearing serious implications for local biosecurity and animal health.
Market access has also been granted to American blueberries from states free of fruit flies, with agreed mitigation measures in place for states where fruit flies are present.
Also read: ‘SA committed to finalising trade agreement’ – Tau
Concerns About Pork Imports and Biosecurity
South Africa also allows market access for American pork, subject to biosecurity requirements.
“The discussions regarding American pork imports are ongoing,” Steenhuisen said. “Our animal scientists warn of the risk of porcine reproductive and respiratory syndrome (PRRS) in the local pig industry.”
PRRS, which is endemic in the US, was estimated to cost the American pork industry $664 million annually between 2005 and 2010 (about R11,9 billion at current exchange rates).
To protect local pigs from this disease – which has not yet been reported in South Africa – specific glands must be removed from certain pork cuts.
The local pig industry is very small, generally geared to local consumption, Steenhuisen said. An outbreak of PRRS could devastate it and pose significant food security challenges,
He emphasised that South Africa remains the custodian of its own biosecurity and must protect itself from possible animal disease outbreaks. “It would be incredibly irresponsible to simply say let’s open up the domestic market to American imports without proper safeguards.”
US chicken and pork are expected to arrive in South Africa within the next two weeks. Tau sees this as a sign that the issues the US had around biosecurity protocols have been resolved.
It’s About More than Tariffs
Steenhuisen said certain demands by the US – among others, around black economic empowerment and that the ANC should publicly condemn the singing of “Kill the Boer, Kill the Farmer” – came as somewhat of a surprise, since the expectation was that negotiations would focus solely on trade and tariffs.
The Department of International Relations and Cooperation should deal with these issues, he said, and added that Ronald Lamola, the minister of this department, was engaging with his American counterpart.
It’s become clear,” he said, that these tariffs are not just about balancing trade. “We are now in a new era where trade and tariffs are being used to address other issues. This is the new normal to which we all have to adapt.”
South Africa was not alone in facing this situation, he said, but one of more than 130 countries experiencing similar issues, and coming together to replace markets that have been lost.
Also read: ‘Trump card’ for Trump tariff sends poultry industry into a frenzy
How Government Is Trying to Mitigate the Impact of US Tariffs
In the meantime, government has taken several steps to mitigate the impact of the increased 30% import tariff on South African products. Cabinet has approved a proposed aid package that includes measures to assist affected companies, and the establishment of an export support office. This office has already assisted 23 companies and received enquiries from a further 54 South African exporters, according to Tau.
The Department of Agriculture will also work with the Department of Employment and Labour to use existing instruments – such as the Temporary Employer / Employee Relief Scheme (TERS), implemented during the Covid-19 pandemic – to help mitigate the impact of possible job losses.
A draft block exemption for exporters will be published on the Department of Trade, Industry and Competition website by the end of the week. This exemption will allow competitors to collaborate and coordinate, with the public given the opportunity to comment before it is finalised.
Market Diversification
Accelerating market diversification is another major priority, both to reduce the impact of the increased tariff and to ensure the long-term resilience and competitiveness of the local economy. Markets in Asia, the Middle East and India are being actively targeted.
“It’s not just about trade figures, but also about protecting jobs,” Tau said. “Diversification safeguards the livelihoods of people in rural areas, while supporting sustainable agricultural growth.”
The government has allocated resources for market expansion, including trade and agricultural attachés, increased capacity for export certification, and efforts to align South Africa’s biosecurity standards with the requirements of these new markets.
A high-level negotiating team, including representatives from the relevant departments, has been appointed and is ready to negotiate with the US to reach a mutually beneficial agreement.
“Our goal is to show that South Africa is not a threat to American industries, but that our trade partnership is actually complementary,” Tau said.
The United States is South Africa’s third-largest trading partner after the European Union and China. However, only 0,25% of South Africa’s total exports go to the US.
South Africa’s agricultural exports to the US have grown significantly in recent years – up 104% since 2018. About 4% of South Africa’s total agricultural exports, valued at R9,8 billion, are destined for the US market.
