[One more tessara in the mosaic of how when the US says Trade, Not Aid, it really means "Trade so long as it doesn't harm a hair on our heads" -- in other words, in your dreams, trade.]
INTERNATIONAL ECONOMY: US pear growers may bite into African trade
By Edward Alden
FT.com site; Jun 26, 2002
President George W. Bush arrived for the G8 summit in Canada on Tuesday set to focus on one of the administration's key convictions: that trade, not aid, offers the best way up for the poor nations of the world, particularly those in Africa.
But less than two years after Congress enacted a big trade bill to open up US markets to Africa, the administration is considering for the first time removing some trade benefits under the act.
Faced with pressure from domestic fruit growers, the US is likely to reimpose a 15 per cent tariff on imports of canned pears from South Africa that was eliminated in 2000 by the Africa Growth and Opportunity Act (AGOA).
US growers have petitioned the office of the US trade representative (USTR) to put the tariff back in place. While a USTR spokesman said that no final decision had been made, a staff committee has recommended to Robert Zoellick, the US trade representative, that such a step be taken to protect the small and ailing US canned pear industry.
The administration is hoping to soften the blow by agreeing at the same time to remove tariffs on South African exports of another product of similar value, manganese flakes.
But the South African government has nonetheless warned Washington that reimposing tariffs on pears "would send a very strong negative message to both African and US companies that any commitment provided under the AGOA to build trade relationships and provide incentives can be easily reversed". By harming the predictability of commercial transactions, the move could "undermine investment and trade throughout the region", South Africa warned.
The issue has again highlighted what to US trading partners has become a disturbing clash between its professed commitment to opening trade, particularly with poorer nations, and a series of decisions, particularly on agriculture, that will hurt the ability of poor countries to sell to the US.
The Bush administration has strongly supported the AGOA, and wants to see tariffs removed on more African exports to the US. Mr Zoellick has called the Africa trade bill a "turning point" in the US economic relation ship with the region.
But the system established by Congress allows any disgruntled US competitors to seek protective tariffs if they are hurt by the new African competition. The dispute over South African pears shows how easy it has become for even a small US industry to win import relief that otherwise violates a central premise of Bush administration trade policy.
The US canned pear industry sells about $100m (#68.4m, E103m) worth of pears each year, supporting 1,600 growers in California, Oregon and Washington. Imports make up just 6 per cent of the US market.
Since the enactment of the AGOA in 2000, the canned pears business has been one of only a handful of South African industries to benefit from the tariff eliminations. Pear exports from the country to the US rose from about $1m in 1999 to $2.6m last year, representing less than 3 per cent of the US market.
But US pear producers say that the cheaper South African fruit is stealing their share of a stagnant market. The industry is already on life support; the largest US canned pear producer is in bankruptcy and the US government spent $83m over the last two years to bail it out by buying canned pears for subsidised school lunch programmes.
The industry has been also been able to enlist the muscle of its local representatives, including Representative Jennifer Dunn of Washington state, a close ally of the Bush administration who is generally regarded as one of the most committed free traders in Congress.
While the administration has touted the AGOA as a vast market opportunity for Africa, the elimination of tariffs has already been selective in an effort to avoid such domestic controversies.
In South Africa for instance, three of its largest fruit exports - canned apricots, peaches and mixed fruit - were excluded from the outset of the programme. Less than 9 per cent of South Africa's clothing exports qualified under the rigid AGOA rules.
Pears, along with edible ice and windbreakers, have been the only real South African success stories so far under AGOA, according to a recent study by the Trade and Industry Policy Strategies, a South African research group.