Agoa.info - African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/Trade minister says South Africa values trade with US ‘enormously’ amid AGOA fears

Trade minister says South Africa values trade with US ‘enormously’ amid AGOA fears

Trade minister says South Africa values trade with US ‘enormously’ amid AGOA fears
Published date:
Wednesday, 24 May 2023
Author:
Terence Creamer

Amid diplomatic tensions with the US over an alleged sale of arms to Russia, South Africa is continuing to make the case for its ongoing designation as a beneficiary of the Africa Growth and Opportunity Act (AGOA), which extends preferential trade access to the giant American market on certain goods and is due to expire in 2025.

In a briefing ahead of his Budget Vote, Trade, Industry and Competition Minister Ebrahim Patel said that he shared the anxiety expressed by Finance Minister Enoch Godongwana about the potential negative effects of any fallout with the US over the alleged sale of weapons or ammunition to Russia, as well as about the prospect of South Africa losing its Agoa designation.

Godongwana said he viewed the allegations in a “very serious light because we are running an economy that is already in junk status and grey listed, and any further action by the international community will exacerbate the problem”.

The Finance Minister noted the allegations, together with the negative perceptions they generated, had already been felt in the currency market.

He expressed concern that the trade and investment channels could be similarly disrupted should the US take punitive measures against South Africa if it was found to have breached its non-aligned policy stance in relation to the war in Ukraine.

Patel noted that a significant share of South Africa’s exports to the US benefitted from the preferences granted under Agoa, even though other products entered the market under the Most-Favoured-Nation treatment provided for under World Trade Organisation rules.

“We will and we should do everything possible to retain that [Agoa access],” Patel said.

“It strengthens the position of South African exporters in the US market and, of course, that helps to create more jobs locally.”

He said that South Africa, along with other African countries, had made the case for an early extension of Agoa during meetings in Washington DC in December and that South Africa would continue to seek an early confirmation, even though historically the US Congress had only granted extensions in Agoa’s final year.

However, this appeal for an early extension was made ahead of the press conference at which US Ambassador to South Africa Reuben Brigety alleged that defence equipment had been secretly loaded onto a Russian cargo ship at the Simon’s Town naval base in December.

While there has since been something of a lull after Brigety was hauled before International Relations Minister Naledi Pandor for making undiplomatic statements, as well as to allow for the inquiry into the matter by a retired judge appointed by President Cyril Ramaphosa to run its course, concerns continue to simmered over South Africa’s status as an Agoa beneficiary.

Patel said South Africa would continue to actively lobby for a continuation of the country’s Agoa designation.

“[But] at this stage what we are able to say publicly is that we value the relationship with the United States enormously.

“We will be working closely with the US administration in making the case for why South Africa should remain in Agoa and we hope that we are successful.”


Video: South Africa's opposition party lobbies US over AGOA

Read related news articles

US ambassador: AGOA is an opportunity to deepen ties between the US and South Africa

President Joe Biden last December at the US-Africa Leaders Summit affirmed that the US will elevate its relationship with Africa. The future is Africa. One example is its youthful population: the median age on the continent is 19. By 2050, one in four people in the world will be in Africa. The US wants them to be healthy and wealthy. What happens in Africa will affect the rest of the globe — and we want to work together to ensure it is...

09 November 2023

US Senator Chris Coons proposes AGOA extension by 16 years, immediate review of SA’s AGOA eligibility

Powerful US Democratic Party Senator Chris Coons is circulating a discussion draft of a Bill to renew the African Growth and Opportunity Act (Agoa) for 16 years that would also require an immediate “out-of-cycle” review of South Africa’s eligibility for Agoa. That could lead to South Africa being removed next year from the programme, which has provided considerable benefits to SA exporters to the US of cars, fruits and wine, in...

07 November 2023

AGOA benefits extend beyond trade [incl. VIDEO of Friday's opening session]

Economies in Sub-Saharan countries stand to benefit far more from the African Growth and Opportunity Act (AGOA) than notable trade statistics, says President Cyril Ramaphosa. “AGOA enhances the diversification of African economies, enabling them to export value-added products. By enabling African countries to have preferential access to the US market, this opportunity incentivises African countries to develop and export value-added goods...

06 November 2023

South Africa pins its hopes on an early 2024 US Congress renewal of AGOA

South Africa’s government is hoping that the process to renew the African Growth and Opportunity Act (Agoa) by the US Congress will be concluded by early 2024, ensuring that more than 20 African countries continue to have duty-free access to the world’s largest economy.   This is the first time that the South African government has given a timeline for when it hopes the US Congress might extend Agoa, which has been renewed twice...

05 November 2023

SA trade minister Patel expresses confidence at media briefing about South Africa’s continued inclusion in AGOA

Ahead of South Africa hosting the US-AfricaTrade and Economic Cooperation Forum – also called the AGOA Forum – from November 2 to 4, Trade, Industry and Competition Minister Ebrahim Patel on October 26 briefed the media on the state of readiness for the forum, expressing confidence that the South African government’s relations with the US were strong. Various South African stakeholders have been motivating for...

26 October 2023

Business Leadership SA calls for business to capitalise on South Africa’s hosting of AGOA Forum

It is notable that South Africa will still host the African Growth and Opportunity Act (AGOA) Private Sector Forum next month, given that several US lawmakers have called for it to be moved elsewhere, and have questioned the country’s preferential trade terms with the US under Agoa as such preferential access to the US markets is open only to African countries that do not threaten American security interests. This is...

24 October 2023

'South Africa expected to retain its AGOA status despite differences with US'

It is almost certain that South Africa’s Agoa status will be renewed despite it and the US often being on opposite sides over geopolitical crises in the past year. The eligibility of countries for the US’s African Growth and Opportunity Act (Agoa) has been under review during the past few months, and it is becoming clearer that South Africa is one of the countries that will continue being a part of the trade programme. A strong...

19 October 2023

South Africa: Entrepreneurial sisters venture into US market [WATCH]

It was a drive to explore international trade that saw entrepreneurial sisters, Michelle and Mo Mokone, grabbing an opportunity to venture into the United States of America market. The pair are the co-owners of Mo’s Crib, a company that produces a range of handmade home décor products.  Their product range includes handwoven baskets, planters, trays, wall art and home outdoor items. It was in 2021 that the pair decided to take...

09 October 2023

US-South Africa relations in focus as AGOA decision nears

By serendipity I found myself attending a hearing in the US Capitol last week on the US-SA bilateral relationship. Such hearings are easy for members of the public to access and, given an afternoon free in Washington between other meetings, I attended. The most striking feature of the hearings was the common refrain that the ANC was failing. It was taken as a given that the ANC is delivering poor governance. US support was framed as...

01 October 2023

South Africa’s access under AGOA helps neighbouring countries, says country's trade minister

SA is to argue strongly that its participation in the Africa Growth and Opportunities Act (Agoa) benefits neighbouring countries through shared value chains, said trade, industry and competition minister Ebrahim Patel on Tuesday. The argument will be made in November when the Agoa forum meets in Johannesburg that neighbouring countries will suffer significant losses if SA is excluded from the scheme, which provides preferential access to...

26 September 2023

Renewed commitment: South Africa to host AGOA summit amid calls for extension

South Africa is set to host the African Growth and Opportunity Act (AGOA) Summit later this year, despite recent diplomatic tensions between the country and the United States (US). In June this year, US legislators called for the relocation of the summit due to controversy surrounding alleged arms shipments to Russia by South Africa. Cleared of any wrongdoing by an internal judicial panel, the US has reaffirmed its commitment to shared growth...

21 September 2023

You are here: Home/News/Article/Trade minister says South Africa values trade with US ‘enormously’ amid AGOA fears