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AGOA: South Africa ready to roll out the red carpet for the US

AGOA: South Africa ready to roll out the red carpet for the US
Published date:
Friday, 27 October 2023

Trade, industry & competition minister Ebrahim Patel says SA is ready to roll out the red carpet for the US ahead of the 20th African Growth and Opportunity Act (AGOA) forum taking place at Nasrec in Johannesburg next week.

“What we are seeking to do is provide a platform in the discussion to reflect on the experience that the African continent and the US has had on Agoa, to look at how we can get more from the trade relationship by complementing Agoa with other measures and the common African position on Agoa, which is to have it renewed for an additional 10 years,” Patel said. 

Speaking to journalists on the state of readiness to host the forum on November 2-4, he said the gathering comes after a meeting between President Cyril Ramaphosa and his US counterpart, Joe Biden, at the White House in September last year.

This was followed by a leadership summit called by Biden in Washington in December, presidential envoys sent earlier this year to the US, and culminating in a meeting in July with the US administration and members of Congress. 

In September, Ramaphosa hosted a round table with American businesses while Cosatu president Zingiswa Losi led a labour delegation to the US.

He said the forum would focus on the African Continental Free Trade Area (AfCFTA) at meetings with ministers, the administration and Congress representatives, together with businesses and civil society groups. 

Among the 2,000 delegates who will gather in Africa’s economic hub is a US delegation to be led by trade secretary Katherine Tai, together with members of Congress, business leaders, labour and civil society representatives and procurers from the US. 

Many African trade ministers are expected to attend. 

Agoa was first launched in 2000. It is an act of the US Congress and it provides preferential access for sub-Saharan countries to the US market and has always been time bound.” 

The latest agreement is due to expire in 2025.

“Agoa is about a partnership by the US with 35 African countries. The forum we are hosting next week takes place in the context of Africa redefining its role in the world,” Patel said. 

Within the AfCFTA, various governments have reduced the barriers to trade with African countries and boosted intraregional trade. 

“The renewal of Agoa is about expanding value-added trade to the world’s biggest market.” 

Patel said SA had agreed to host the forum to underline its economic relationship with the US. 

“It’s a vital relationship,” he said, adding that the US is a significant market for SA products. 

SA is the largest African exporter of goods to the US.

“The US is also important as an overall trading partner and as SA’s second-largest national trading partner. In turn, we are the biggest market for the American exports in Sub-Saharan Africa. The American market is a tough one to get into and to stay in because companies around the world compete to get a part of the world’s biggest market — and the fact that we are succeeding is great,” he said.

The countries have strong investment relations with each other, with two-way trade standing at $12bn. “It’s a mutually beneficial relationship. Africa and SA provide an enormous quantity of raw materials that fuel American industrialisation.” 

The relationship goes well beyond trade and investment, he said. It includes political, technological and tourism partnerships.

Africa wants to see the rules around Agoa become more user-friendly. 

During the forum there will be discussions on the difficulties business has in accessing Agoa, how the two countries can develop joint export strategies, agriculture and food security, manufacturing, health products and diversifying global supply chains and the AfCFTA, among other issues. 

“It’s a package in which we are rolling up our sleeves and getting down to how we can get more out of this economic relationship for the continent and the US.”

Losi said that for the first time organised labour will be included in the discussions. “Agoa has not just been important to SA’s industrial development, but also to that of other African states.

“We strongly believe that if SA were to exit from Agoa, it would not only be a devastating blow to local jobs in SA, but also to those within the region and it will further add pressure to an already unmanageable migration flow to SA.” 

Losi said Cosatu fully supported the government’s efforts to extend SA’s membership in Agoa. 

Business Unity SA CEO Cas Coovadia said Agoa resulted in economic growth and job creation.

“We are a country that is doing a lot of work to put us on a sustainable economic growth path, and in doing so we need to ensure that we establish relationships with critical partners all over the world.”

Coovadia said it was important for business, labour and the government to have the same message to promote the extension of Agoa and for SA to remain a critical partner in Agoa. 

Black Business Council deputy president Gregory Mofokeng said he was looking forward to discussions on how to scale up Agoa. “That should result in investments, which will benefit the economy broadly, create much-needed jobs and enable inclusive economic growth.”

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