TRALAC - Trade Law Centre

USTR Zoellick Sees Progress On Advancing Doha Trade Agenda

Tuesday, 24 February 2004

Source: www.AGOA.info

Data published a few days ago by the United States International Trade Commission for the year 2003 reveals that US imports of transportation equipment under AGOA rose 34% in $-terms between 2002 and 2003. African exports in this category rose from US$ 545 million in 2002 to US$ 732 million last year.

A closer analysis shows that South Africa is the only AGOA-beneficiary country exporting transportation equipment under AGOA. ‘Transportation equipment’ includes motor vehicles (cars, trucks and buses), engines and certain motor vehicle components.

The value of South Africa’s transportation equipment exports to the US amounted to US$ 821 million in 2003, up from US$ 616 million the previous year. This growth in exports took place on the back of a strengthening local currency against the US$. US$ 731 million (or 90%) of the country’s automotive exports to the US are AGOA-eligible, while most of these exports (US$ 634) did not previously qualify for GSP preferences.

It is interesting to note that not long ago, in 2001, South Africa’s imports of transportation equipment from the US exceeded South Africa’s exports to the US almost 3-fold. Now, 2 years later, the trade balance is still in favour of the US but only by a very small margin (less than 4 %). Global supply configurations in the auto sector, export-led growth strategies and massive investments have together with AGOA made the US an important market for South African-produced transportation equipment. In fact, almost two-thirds of South Africa’s exports in goods-categories added to the GSP under AGOA consisted of transportation equipment in 2003.

South Africa’s most important automotive exports under AGOA during 2003 consisted of ‘motor vehicles with an engine capacity of between 1,500cc and 3,000cc’ (HS code 8703230062). Normal import tariffs on this item are 2.5% ad valorem. 2003 exports were valued at US$ 319 million, while 2002 exports were valued at US$ 333 million. This marginal $-value drop is significant when viewed against the local currency appreciation in 2003, and translates into a substantial drop in exports in local currency terms.

The next most important automotive export category is ‘motor vehicles with an engine capacity exceeding 3,000cc’ (HS code 8703240062), where AGOA also provides exporters with a 2,5% ad valorem tariff saving. 2003 exports increased by over 200% year-on-year in $-terms from US$ 78 million to US$ 244 million. Motor vehicles with an engine capacity of over 3,000cc but for the transport of persons (HS 8703240054) remained largely unchanged over the past 2 years at US$ 60 million in 2003 (normal tariff is 2,5%).

Despite a number of automotive component products qualifying for duty-free access under AGOA, many were previously contained in the GSP and thus do not present a “new” market opportunity for African exporters. Insignificant exports were recorded in “newly-added” AGOA categories, and consisted mainly of “ball bearings other than ball bearings with integral shafts” (HS 8482105048; 2003 value of exports: US$ 0,1 million) and “tapered roller bearings” (HS 8482200080; 2003 exports: US$ 0,043 million).

[Eckart Naumann]


Read some related news stories in AGOA.info’s news archives :

AGOA Offers Template For Growth;

Erwin Hopes Ford SA Will Join Growing Ranks of Exporters;

Export Growth Could Be Eroded, Says BMW Boss

Multinational BMW to benefit from AGOA scheme.


Regularly updated trade statistics on AGOA.info include (Click to follow the links):

  • 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.