TRALAC - Trade Law Centre

Swaziland's AGOA exports decline by E200m

Tuesday, 13 March 2012

Source: Swazi Observer (Swaziland)

Swaziland's exports to the United States (US) under the African Growth and Opportunity Act (AGOA) decreased by over E200 million last year. Swaziland Investment Promotion Authority (SIPA) Chief Executive Officer Phiwayinkhosi Ginindza said last year exports were at about E539.7 million ($77.1 m) compared to E777.7 million ($111) in 2010.

He said US exports to Swaziland last year were E121.8 million ($17.4).

Ginindza associated the decline in exports to the difficult market conditions including the strengthening of the Lilangeni against the US Dollar and the global recession.

He was speaking during a training meeting on AGOA at Sibane Hotel, Ezulwini organised by SIPA in partnership with the Southern Africa Trade Hub (SATH) yesterday.

“AGOA came into effect in the year 2000. It is a US Trade Act that significantly enhances US market access for about 40 Sub-Saharan countries. The Act was originally expected to cover eight countries from 2000 - 2008, but with amendments signed into law by President George Bush in 2004 it was further extended to 2015, with a special dispensation relating to apparel extended to 2007,” he said.

Ginindza said AGOA built on existing US trade programmes by expanding the duty free benefits previously available only under the General System of Preferences (GSP) programme.

He said the duty-free access to the US market under the combined AGOA/GSP programme stood at approximately 7 000 product tariff lines including roughly 1 800 product tariff lines that were added to the GSP by the AGOA legislation.

Ginindza said these include items such as apparel and footwear, wine, certain motor vehicle components, a variety of products, chemicals, steel among others.

He said the total exports from sub-saharan to the US under AGOA (including GSP provisions) in 2011 were approximately E376.6 billion ($53.8 billion) of which energy related products account to over 90%.

“That is E341.6billion ($48.8 billion) and the balance (representing non-oil products) totalled E28 bn ($4 bn) and included value added products such as apparel, foot wear, processed agricultural and manufactured goods. The top five beneficiary countries were Nigeria, Angola, South Africa, Republic of Congo and Chad,” he said.

Ginindza said other leading beneficiaries included Gabon, Lesotho, Kenya, Mauritius and Swaziland.

No opposition to AGOA fabric deal

SO far, there is no strong opposition of the third country fabric provision of the African Growth and Opportunity Act (AGOA) and as such it might continue.

US Agency for International Development (USAID) Regional Trade Programme Manager Rick Gurley said they were hoping that the provision of the Trade Act would continue benefitting African countries.

He said there were huge opportunities for garments in the United States of America as there were no businesses concentrating on it.

Gurley said they were lobbying for and discussing the extension of AGOA beyond September 2012.

Swaziland Investment Promotion Authority (SIPA) Chief Executive Officer Phiwayinkhosi Ginindza said the third country fabric provision was still under consideration by the US government and all those involved.

He said there were still discussions around the extension of this beyond the stipulated time.

Ginindza said the third party country fabric provision allowed countries outside the 40 countries to produce and sell to the eligible ones.

“Now they want us to produce the textile ourselves and stop sourcing from other illegible countries. There are quite a number of problems that the 40 sub-saharan countries are faced with as regards AGOA and one of them being the uncertainty around the extension of AGOA beyond 2015,” he said.

He said also domestic support for local producers in the US and other European countries created a lot of unfair competition.

 

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