TRALAC - Trade Law Centre

SACU Exports to the United States Show Healthy Increase

Wednesday, 22 November 2006

Source: AGOA.info

SACU exports to the US have grown by 25% in the 9 months to September 2006, compared with the same period in 2005. Much of this increase is due to robust trade in minerals and metals, the Southern African Customs Union’s (SACU) largest export sector.

Total exports to the US were valued at US$ 6.2 billion compared with US$ 5 billion the previous period. Of this, US$ 1.7 billion was exported under AGOA, meaning that it entered the United States duty free, although other exports may have likewise obtained duty-free entry where current US import tariffs are already 0%. If taking out mineral and metal exports, the rate of AGOA utilisation by SACU countries rises to 63% overall (see a detailed bilateral trade profile here .)

SACU also continues to enjoy a substantial trade surplus in its trade with the US. Total two-way trade over the January-September period was US$ 9.4 billion, with the trade surplus in SACU’s favour at over US$ 3 billion. South Africa is the dominant trade partner in SACU with respect to US trade, accounting for almost 90% of US-bound exports.

Besides minerals and metals, leading export sectors are the clothing sector, transportation equipment and chemicals & related products. 93% of textiles and clothing are exported under AGOA, and almost all of this under the LDC provisions that allow SACU Member States Lesotho, Namibia, Botswana and Swaziland to use fabrics from non-AGOA countries in the manufacture of AGOA-eligible exports. Unless this provision is extended beyond October 2007, when it is set to expire, there will be a major decline in exports. Apparel quotas, which in terms of the AGOA legislation have been halved for LDC clothing exports shipped under the third country fabric rule in the current year, may even result in an earlier embargo on LDC clothing than the end of the current quota period. Quota utilisation under the LDC rule currently stands at just under 8%, for the first month of the annual quota period which spans October 2006 to September 2007. See quota utilisation rates, by country, here.

In the transportation sector, motor vehicle exports (HS 870323: motor vehicles with engine capacity 1,500cc to 3,000cc) have seen a major increase this year, rising from US$ 96 million in 2005 (January-September) to US$ 283 million, a 300% year on year increase. AGOA removes the 2.5% import duty that would normally be levied on Southern African exports. South Africa, which accounts for all of these exports, is currently the 10th largest foreign supplier of motor vehicles in this category to the United States, up from 12th last year (it has since overtaken Brazil, which exports less than half of South Africa’s volume). South Africa holds a 0.3% share of the total US import market in this category.

[Eckart Naumann]



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of SACU Countries’ bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • 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.