South Africa: African free-trade deal can help boost exports to the US, says Patel

South Africa: African free-trade deal can help boost exports to the US, says Patel
Published
Sunday, 04 August 2019 ~ BEKEZELA PHAKATHI

The continent has the opportunity to align the new deal with plans to increase access to US markets. 

The establishment of an African free-trade zone will enable the continent to speak with one voice and potentially boost exports to the US, say SA’s trade and industry minister Ebrahim Patel says.

Concerns have been raised about the future of the African Growth and Opportunity Act (Agoa) under President Donald Trump's administration.

Enacted 19 years ago, Agoa gives special treatment to 39 African countries by abandoning import levies on more than 7,000 wide-ranging products. The US president has previously made it clear he wants to protect US domestic business and manufacturing against threats from abroad.

Analysts have suggested that this could mean added import duties on South African exports to the US. Trump’s foreign policy on Africa has not been clearly defined, with many observers suggesting that the continent is likely to slide down his list of foreign policy priorities.

In 2018, SA joined various other countries on the continent in signing the Continental Free Trade Area agreement that aims to create a single continental market for goods and services, with free movement of business people and investments. With about 1.2-billion people in Africa, the agreement is set to create one of the largest free-trade market zones in the world.

Patel and his deputy,  Fikile Slovo Majola, are attending the Agoa forum which started at the weekend and ends on Wednesday. 

The Agoa forum is an annual meeting held alternately in Africa and in the US between the ministers of trade of Sub-Saharan African countries and their US counterparts.

Speaking in Abidjan in the Ivory Coast during the 18th Africa Growth and Opportunity Act forum, Patel said the continent has the opportunity to align the Continental Free Trade Area (CTFA) with plans to increase access to US markets.

“We have an opportunity in these proceeding to align Agoa to goals of the CFTA to enable us to speak with one voice,” Patel said of the Abidjan meeting.

He pointed out that Sub-Saharan exports to the US have been on a downward trend in recent years. Total exports from the region to the US increased from $22bn in 2000 to a high of $82bn in 2008 at the height of the commodity boom.

Patel said countries in the region have to work closely together to make the most of Agoa preferences and deepen trade relations with the US.

“The US is the world’s largest economy and access to the US market and to American investment in our economy are important ways of addressing job creation and the elimination of poverty. We look forward to a constructive and positive discussion with the US trade representative,” he said.

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