Yesterday Senator Orrin Hatch (R-UT), chair and ranking member of the Senate Finance Committee, and ranking member Senator Ron Wyden (D-OR) as well as House Ways and Means Committee Chairman Paul Ryan (R-WI) and ranking member Sander Levin (D-MI) announced legislation to reauthorize the African Growth and Opportunity Act (AGOA).
The bill, entitled The AGOA Extension Act of 2015, would extend AGOA for 10 years and takes strong steps aimed at preventing countries from receiving benefits under the program while imposing unfair limits on American imports. The bill gives the administration new flexibility to suspend or selectively limit the benefits of participating countries – rather than solely being empowered to completely withdraw all benefits – giving the United States new leverage to persuade South Africa to drop its long-standing ban on U.S. poultry.
South Africa represents the largest potential market in Africa for U.S. poultry, but in 2000 — shortly after the enactment of AGOA — it began imposing antidumping duties on U.S. poultry products, effectively slamming the door on American chicken imports. The duties are based on a pricing system that values all parts of the chicken the same, which is neither accurate nor commonly accepted.
The bill also allows the administration to initiate an out-of-cycle review of beneficiary countries to determine continual progress in meeting the eligibility criteria. Additionally, there is a Sense of Congress provision that states that the president should initiate a review of South Africa, or any other non-compliant beneficiary, within 30 days of enactment.
U.S. Senators Johnny Isakson (R-GA) and Chris Coons (D-DE), both members of the Senate Foreign Relations Committee and the former ranking member and chair of its Subcommittee on African Affairs, respectively, today issued the following statement:
“The growth of sub-Saharan economies is not only good for the region, but for American businesses and American workers,” the senators said. “We have seen firsthand how, over the last 15 years, the generous trade preferences offered to those countries by the United States under AGOA have played an important role in the region’s impressive growth. We believe passionately in AGOA’s value and support its long-term renewal, but believe it unfair and inappropriate that the country that benefits from the law the most — South Africa — continues to maintain unreasonable tariffs on American poultry. The Hatch-Wyden-Ryan AGOA reauthorization legislation contains strong, measured steps to ensure that this kind of unfair practice will not continue.”
Under current law, the U.S. government only has one option for punishing an AGOA beneficiary that is not living up to the standards set in the law: complete termination of benefits. This option has been rarely invoked because it left the U.S. government with no further tools for achieving an agreeable outcome. This reauthorization bill empowers the administration to limit or suspend a non-compliant country’s benefits in a more incremental and targeted manner.
“We expect the U.S. Trade Representative to utilize this new flexibility to level the playing field for American-grown and American-made products — including chicken — in South Africa. Working with a number of our colleagues, we are also developing additional amendment language reflective of our deep concern over South Africa’s continued disrespect for its trade relationship with the United States,” the senators continued.
On March 31, 13 senators wrote to the South African government to express their concern about the lack of progress being made in negotiations between the South African and American poultry industries.
At a Senate Finance Committee hearing on Thursday, Isakson questioned U.S. Trade Representative Michael Froman about the ongoing dispute between the U.S. and South African poultry industries, the African Growth and Opportunity Act and Trade Promotion Authority. Video of Isakson’s exchange can be viewed here.
The bill now faces debate on the House floor.
