American firms support renewal of AGOA for South Africa
US firms in SA support the renewal of the African Growth and Opportunity Act (Agoa) for SA, the American Chamber of Commerce (AmCham) in SA said on Wednesday.
Delegates from the representative body of American businesses in SA recently visited Washington DC and met leaders in both houses of the US Congress to lend their support for the renewal of the act, which expires in September next year.
AmCham said the delegation shared initiatives that it was discussing with the South African government. These revolved around "improving the business climate for American companies" and included the issue of equity ownership in the context of broad-based black economic empowerment.
The other issues being discussed included the effects of labour strikes on business and policy alignment between different South African government departments.
Agoa allows more than 98% of South African exports to enter the world’s largest economy duty-free.
AmCham’s visit comes at a time when some US lawmakers are questioning continuing South African participation in Agoa on the basis that it is a middle-income country.
"SA is the manufacturing hub of the continent and Agoa promotes regional trade which feeds into the global value chain," Jeff Nemeth, Amcham president and CEO of Ford Motor Company in SA, said on Wednesday. It was "imperative" that SA continued to benefit from duty-free trade with the US, as Agoa encouraged regional integration, "which is an objective of both the South African and US governments".
AmCham said the US was SA’s largest portfolio investor and its third largest overall trading partner. The chamber was "encouraged" that US decision makers understood that a decision on Agoa needed to be made urgently to enable businesses to plan accordingly.
It was AmCham’s second visit in support of the renewal of Agoa for SA. The US Congress has a final say on the matter. US trade data show that South African exports to the world’s largest economy were worth $3.6bn last year, making it the second-largest destination for SA exports after China. The US accounted for 7% of all South African exports.
The US is by far the largest export destination for SA’s vehicle manufacturing sector, comprising 21% of the total, including 42% of all passenger cars.
Overall, the US is the leading destination for SA’s exports of vehicles, industrial machinery and chemicals.
A US public report will be submitted to Congress next month to help inform the decision that it will take over Agoa. AmCham has been invited to contribute to this.
The body’s statement of support for SA over Agoa comes a day after a forum in Sandton on US-Africa trade and investment. Speakers included Scott Eisner, an official of the US Chamber of Commerce in Washington DC, and US ambassador to SA Patrick Gaspard.