TRALAC - Trade Law Centre

African exports to US decline 13% despite AGOA's trade boost

Monday, 24 February 2003

Source: Business Report

Johannesburg - African exports to the US fell 12.9 percent last year despite increased sales to the world's biggest market under its Africa Growth and Opportunity Act (Agoa).

According to the US International Trade Commission (USITC), South Africa's Agoa exports had grown 46 percent to $1.3 billion between 2001 and 2002, even though its total exports had fallen 4 percent to $4.2 billion over the period.

Standard Bank economist Henry Flint said the fact that exports under Agoa had grown when overall exports from the continent had fallen suggested economies had "aligned themselves" to take advantage of Agoa even though US demand was sluggish.

The USITC said the drop in African exports followed an 8 percent fall in 2001. At the same time, US imports from Latin America, Asia and Europe grew.

The fall in African exports means the continent's share of total US imports fell from 2.2 percent in 2001 to 1.9 percent in 2002. Sub-Saharan Africa fared the worst, with its share falling from 1.9 percent to 1.5 percent.

Total exports from the 36 eligible African countries fell a massive 35 percent in 2002. At the same time, their exports under Agoa increased 10 percent.

Flint said the increase in Agoa-related trade could "partly be explained by the gradual entry of countries into the Agoa initiative and the time it took eligible countries to prepare and take advantage of Agoa benefits"

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For Agoa-eligible countries, exports under the scheme grew from 47 percent of the total to 64 percent in 2002. The oil industry is the biggest beneficiary under Agoa, but textiles' share is growing dramatically, having gone up 123 percent in 2002.

Flint said the ongoing review of Agoa would broaden the eligibility of products and countries under extended textile provisions and this would help the sector's - and therefore southern Africa's - share of imports grow.

Lesotho is the biggest textile and clothing supplier under Agoa, with 41 percent of eligible-country exports in the sector; 98 percent of Lesotho's exports to the US are in terms of Agoa.

Because of oil exports, Nigeria has consistently been the biggest beneficiary of Agoa, with $5.4 billion in Agoa exports in 2002. Total exports were $5.8 billion. In 2002 South Africa took over second place from Gabon, another oil exporter, which exported $1.1 billion under Agoa. USITC data show Nigeria exported $5.4 billion to the US in 2002, South African exports totalled $1.3 billion and Gabon $1.1 billion.

Flint said that because the US economy was likely to remain subdued in 2003, the outlook for African exports was not positive.