TRALAC - Trade Law Centre

South Africa: AGOA's positive impact felt in the Cape

Wednesday, 07 August 2019 Published: | Virginia Blaser

Source: Independent Newspapers

Two hundred and twenty years ago, the second US President John Adams sent an American, John Elmsie Jr, to Cape Town to serve as the first US government diplomatic representative to the Cape of Good Hope. 

Elmsie’s presence was largely focused on commerce; he studied the local economy, reviewed regulations and worked to encourage US trade.  

Since Elmsie’s launch of our diplomatic relations two centuries ago, the Western Cape and the US’s trade and commercial ties have grown significantly. 

Today, the US is the Western Cape’s top foreign direct investor and directly contributes to almost 100 foreign direct investment projects worth $2.3 billion (R34.24bn). This US investment has created more than 8 000 jobs in the province.  

In the past six years alone, Western Cape exports to the US have doubled, reaching more than $688 million of goods to the US in 2018. It is clear that, despite the geographic distance between us, our economies are growing together.  

Indeed, the US is the third largest export market for goods from the Western Cape, behind only Namibia and the UK. 

These exports are facilitated, in part, by the African Growth and Opportunity Act (Agoa), which allows duty-free exports of more than 6 500 goods from Africa to the US.  

Since it was enacted in 2000, Agoa has served as the cornerstone of US economic engagement with Africa, particularly South Africa, which is the single greatest African beneficiary of Agoa.  

Agoa has helped create hundreds of thousands of jobs and economic opportunities across the continent. This is particularly true in the Western Cape as 18 of the province’s 25 top exports to the US are exported duty-free.  

These products include jewellery, engine parts, citrus, wine, boats, seafood and leather. Agoa has been the primary driver for the dramatic increase in exports from the Western Cape to the US.

This year’s Agoa Forum, which ended yesterday in the Ivory Coast, marked the 18th year for leaders from African countries and the US to discuss how to promote trade, business, and investment opportunities that sustain economic growth in Africa.

The Forum provided an opportunity to take stock of Agoa’s successes, and advance a dialogue on the future of the US-Africa trade and investment relationship.  

The mutually beneficial trade relationship between the US and the Western Cape is one of these successes and demonstrates how our trade can grow the Western Cape’s economy and provide economic opportunities.  

As in the 18th century, our official presence in Cape Town continues to focus on trade, investment, and economic opportunities to create jobs and wealth.  

As the current Consul-General in Cape Town, I am proud to continue the efforts begun by John Elmsie and guided by more than 50 others. 

I look forward to working together with the government, business leaders, and civil society to expand our excellent economic partnership and create ever more opportunities for growth and joint prosperity.   

  • Virginia Blaser is the US Consul-General (Cape Town)

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