TRALAC - Trade Law Centre

Uganda's Tri-Star Scoops Fresh $10m US Garment Contract

Friday, 30 January 2004

Source: Business Day (Johannesburg)

A further weakening of the dollar against major currencies this year may have a negative effect on exports from sub-Saharan Africa, warns Henry Flint of Standard Bank's economics division.

This includes exports under the African Growth and Opportunity Act (Agoa).

The impact might be twofold, he says. Lower demand from the US brought about by the weaker dollar may result in a slowdown in imports into the US from countries which benefit from Agoa.

"A weaker dollar may also see further appreciation in the currencies of some of the main Agoa beneficiary countries.

"This could render the products from these countries less competitive globally," says Flint.

This may again cause a further slowdown in exports from these countries.

Agoa has yielded substantial benefits for SA and other eligible countries to date. It is touted as the key reason for a turnaround in SA's trade balance with the US from a deficit before the launch of the programme in 2000 to a surplus of about $2bn now.

"It is clear that the pace of US economic recovery and developments in the US dollar exchange rate will dictate the benefits qualifying African countries will enjoy under Agoa in 2004," Flint says.

Until recently, US imports have remained strong. But Flint says November 2003 data showed a decline in imports, which many commentators believe might be a sign that the weaker dollar is finally curbing import demand.

A sustained decline in US imports would thwart the strong growth pace to date in exports from SA to that country.

Agoa allows duty-free access in the US for over 1800 products from SA and other eligible countries.



Regularly updated trade statistics on AGOA.info include:

  • All Countries’ AGOA and GSP Trade Overview

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.