South Africa: Government and business leaders need to lobby for United States to extend AGOA
AGOA has benefitted South Africa and Sub-Saharan Africa enormously since its introduction in 2000. The imminent arrival of US president, Barack Obama, on a state visit to South Africa is a perfect opportunity for government to discuss its extension when it expires in 2015.
South African government and business leaders need to maximise the effectiveness of their lobbying in a concerted effort that will result in the U.S. government’s African Growth and Opportunity Act (AGOA) being extended when it expires in 2015.
This is the view of Webber Wentzel partner and international trade law specialist, Meluleki Nzimande, who believes that the preferential trade legislation has considerably assisted several South African business sectors over the past 13 years.
“Our motor vehicle manufacturing industry is a prime example of an industry sector that has benefitted significantly from AGOA. It would be a blow for the industry if AGOA is not extended again,” said Nzimande, stressing the need for intensive negotiations and consultation to take place during and after President Barack Obama’s visit to South Africa in order to increase the likelihood of the legislation being extended. This is particularly important in light of the belief held by some in the U.S. that South Africa, being a middle income economy, should be excluded from AGOA. A clear message needs to be communicated to U.S. decision makers, particularly the U.S. congress, that it is in the interest of the U.S. and South Africa for AGOA to be extended.
When it came into effect in October 2000, AGOA (as it is colloquially known) originally covered an eight year period until September 2008, but amendments signed into law by former U.S. President George W Bush in July 2004, extended AGOA until 2015.
South Africa is one of around 40 Sub-Saharan African countries that benefit from AGOA which was designed to build on the Generalised System of Preferences (GSP) programme, providing duty-free access to U.S. markets for a wide range of goods and products.
Around 7,000 product tariff lines are covered by AGOA/ GSP preferential provisions including items such as apparel, footwear, motor vehicles, agricultural products, chemicals and steel.
According to AGOA.info, a website that specifically deals with facts and figures relating to AGOA, In 2012, South Africa’s trade with the U.S. showed a positive balance for South Africa to the value of $US 1.6 billion. In 2010, the positive trade balance was $US 2.9 billion and in 2011 it was $US 2.6 billion, indicating the cumulative extent of the benefit for South Africa and several industry sectors.
Demonstrating how important AGOA is for Sub-Saharan Africa, in 2011 the positive trade balance for the African countries included in the programme was $US 512.8 billion with exports to the U.S. of $US 71.1 billion far outweighing imports of $US 19.3 billion.
“President G.W. Bush extended AGOA by seven years, so it would be hugely beneficial for South Africa and all the other benefitting Sub-Saharan African countries if the legislation can again be extended for a similar period,” said Nzimande, adding that AGOA also has several benefits for the U.S.
“While Sub-Saharan Africa countries are the major beneficiaries of AGOA, it is not one-sided. The U.S. benefits from enhanced trade between itself and Africa, causing it to be seen as a good partner and opening the doors for U.S. manufacturers to access markets on the continent.”
In addition, Nzimande said the conditions attached to AGOA advance U.S. efforts to promote political pluralism on the African continent, the protection of intellectual capital and the protection of human and workers’ rights.
Read related news articles
South Africa walks a tightrope on US relations
South Africa has been conducting a high-wire act in its relations with the United States (US). It is maintaining friendships with Washington’s enemies like Russia, Iran and China while trying to avoid disrupting its economic relations with America. Tensions came closer than ever to breaking point this month as the US House of Representatives’ Committee on Foreign Affairs passed the US-South Africa Bilateral Relations...
28 March 2024
Remarks by Deputy Treasury Secretary Adeyemo on the US-South Africa economic relationship
As Prepared for Delivery in Johannesburg, South Africa Thank you for the warm welcome. I want to express my gratitude to Consul General Spera and the American Chamber of Commerce for hosting me. I am honored to be joined today by South African Entrepreneurs that are building companies to unlock the economic potential of their country. I owe my own presence here today to the inspiration I drew from South Africa. In the middle of the...
13 March 2024
South African president Ramaphosa meets with US congressional delegation
South African President Cyril Ramaphosa today, 21 February 2024, received for a visit from a bipartisan congressional delegation from the United States of America, in Tuynhuys, Cape Town. The delegation is visiting South Africa at the invitation of the Aspen Institute. The President and the US congressional delegation discussed the importance of the relationship between South Africa and the US, which manifests in strong economic,...
21 February 2024
US congress receives Bill to review South Africa relations
A bill has been submitted to the United States congress calling for a full review of the country’s bilateral relationship with South Africa following the International Court of Justice ruling that found it plausible that Israel has committed acts of genocide against Gaza. The bipartisan bill which was introduced by US Republican congressman John James and Democratic Party congressman Jared Moskowitz this week could threaten South...
09 February 2024
Fitch research unit expects better AGOA deal for South Africa
Fitch’s research arm, BMI, believes SA has done enough to get improved trade terms under the African Growth & Opportunity Act (Agoa), which it expects to be extended and modified before its expiry in September 2025. But it warns that the deal might be stillborn if Donald Trump is elected US president. The research think-tank said in a note it assigns a 65% probability that Agoa will not only be renewed but modified to the benefit of...
09 January 2024
South Africa: BLSA CEO calls for more companies to leverage AGOA opportunities
Many more South African companies could benefit from the African Growth and Opportunity Act (AGOA), which gives eligible countries access to US markets free of tariff barriers, business organisation BusinessLeadership South Africa (BLSA) CEO Busi Mavuso writes in her weekly newsletter. Apart from mainstream formal sector businesses, there are opportunities to enable more entrepreneurs, including women-led...
20 November 2023
US ambassador: AGOA is an opportunity to deepen ties between the US and South Africa
President Joe Biden last December at the US-Africa Leaders Summit affirmed that the US will elevate its relationship with Africa. The future is Africa. One example is its youthful population: the median age on the continent is 19. By 2050, one in four people in the world will be in Africa. The US wants them to be healthy and wealthy. What happens in Africa will affect the rest of the globe — and we want to work together to ensure it is...
09 November 2023
US Senator Chris Coons proposes AGOA extension by 16 years, immediate review of SA’s AGOA eligibility
Powerful US Democratic Party Senator Chris Coons is circulating a discussion draft of a Bill to renew the African Growth and Opportunity Act (Agoa) for 16 years that would also require an immediate “out-of-cycle” review of South Africa’s eligibility for Agoa. That could lead to South Africa being removed next year from the programme, which has provided considerable benefits to SA exporters to the US of cars, fruits and wine, in...
07 November 2023
AGOA benefits extend beyond trade [incl. VIDEO of Friday's opening session]
Economies in Sub-Saharan countries stand to benefit far more from the African Growth and Opportunity Act (AGOA) than notable trade statistics, says President Cyril Ramaphosa. “AGOA enhances the diversification of African economies, enabling them to export value-added products. By enabling African countries to have preferential access to the US market, this opportunity incentivises African countries to develop and export value-added goods...
06 November 2023
South Africa pins its hopes on an early 2024 US Congress renewal of AGOA
South Africa’s government is hoping that the process to renew the African Growth and Opportunity Act (Agoa) by the US Congress will be concluded by early 2024, ensuring that more than 20 African countries continue to have duty-free access to the world’s largest economy. This is the first time that the South African government has given a timeline for when it hopes the US Congress might extend Agoa, which has been renewed twice...
05 November 2023
SA trade minister Patel expresses confidence at media briefing about South Africa’s continued inclusion in AGOA
Ahead of South Africa hosting the US-AfricaTrade and Economic Cooperation Forum – also called the AGOA Forum – from November 2 to 4, Trade, Industry and Competition Minister Ebrahim Patel on October 26 briefed the media on the state of readiness for the forum, expressing confidence that the South African government’s relations with the US were strong. Various South African stakeholders have been motivating for...
26 October 2023