The country’s participation in the US AGOA will finally expire at beginning of January 2027
South African fruit exporters to the US are looking to maximise shipments during the next two months before the country’s participation in the American Growth and Opportunities Act (AGOA) expires on 1 January 2027.
Fruit shipped before this deadline will still enter the US under current terms.
The widely expected move was announced yesterday (2 November) by the US administration and has caused widespread unhappiness and comment in South Africa. Another African nation, Rwanda, has also lost its membership.
It ends a 24 year spell during which the South African citrus sector in particular derived great benefits from the act and built a flourishing business, which annually involved shipments of more than 100,000 tonnes annually to the US.
The Citrus Growers’ Association of Southern Africa (CGA) views it as a serious blow to the citrus industry.
“This will be a loss not just for us, but the US consumer will lose too,” said Dr Boitshoko Ntshabele, chief executive of the CGA.
”Citrus trade between SA and the US has always been mutually beneficial. Our citrus is complementary to their production. Our fruit helps keep American consumers in the citrus category during the US off-season.
”Seasonal fresh produce does not threaten US jobs,” he continued. ”It helps keep America healthy, and helps contain food inflation.”
Citrus growers do have something to be thankful for, Ntshabele pointed out.
“The current understanding of the playing field is that oranges shipped from the Western and Northern Cape regions are still exempt from 12.5 per cent tariff rate, but a rate of duty based on cents per kg will now apply to oranges,” the CGA stated.
”The other citrus varieties will carry both the 12.5 per cent and the rate of duty.”
Losing out on the AGOA means, however, that the exporters of mandarins, lemons and grapefruit will face both the Section 301 tariff and the normal rate of duty.
“This would place them at a severe disadvantage to competitors like Peru and Chile, who benefit from trade agreements as well as shorter transit times,” the association commented.
The announcement was followed immediately by calls for the South African government to step up free trade talks with the US.
Most commentators are realistic and have said that the current diplomatic climate between the White House and Lethuli House – the ANC government headquarters in Johannesburg – is not conducive to these talks.
Even if the Democratic Party flips the House of Representative and the Senate in this week’s mid-term elections, they believe that new trade agreements will have to wait till after the Trump administration leaves the White House.
