New AGOA deal expects more of SA but offers less, says Davies
New conditions attached to the US’s African Growth and Opportunities Act (Agoa) and changes in US trade policy would reduce the value of the measure for SA while raising its costs, Trade and Industry Rob Davies said on Thursday.
This is the first time Mr Davies has expressed disillusionment over the way the renewal of the act, which expires at the end of September, has been used to extract concessions from SA. He said he would raise the matter in the Cabinet shortly.
The US senate recently passed a bill extending Agoa for 10 years with SA included but with stronger conditions. It includes a provision that a review of SA’s trade and investment policies must take place within 30 days of enactment to determine their openness to US products. If found wanting, SA’s benefits could be limited or it could be suspended as a participant.
"Notably absent is any improvement in the level of access of Agoa-eligible countries’ products to the US market," Mr Davies said, ahead of his budget vote speech in Parliament.
It was clear, he said, that the US wanted to transform its trade relationship with Africa from one of nonreciprocal concessions under the current Agoa to one of reciprocal agreements. "It is no longer the same game."
Currently the value of Agoa for SA exceeded its costs because of the benefits for the automotive, agro-processing and chemical industries. But this was likely to change.
SA has had to face a raft of US demands in its negotiations on the Agoa renewal. Objections were raised over its restrictions on US poultry, pork and beef exports, and the Security Industry Association of America objected to the Private Security Industry Regulation Amendment Bill.
The bill, which requires foreign-owned security companies to sell at least 51% of their local businesses to South Africans, is being discussed within government.
There is still no agreement between the South African and US poultry associations over the quantity of US chicken that should be allowed into SA free of antidumping duties. Mr Davies will meet US trade representatives in Paris early next month in a bid to broker a deal on this.
Read related news articles
New government of national unity gives South Africa a honeymoon period for keeping its AGOA status, say analysts
New Trade and Industry Minister Parks Tau is fighting for South Africa's continued participation in AGOA at the AGOA Forum in Washington this week. The formation of the Government of National Unity (GNU) has secured South Africa a “honeymoon period” for retaining its privileged access to US markets under the African Growth and Opportunity Act (Agoa). This is the view of US politicians and South African trade analysts on the eve of the...
23 July 2024
South Africa plans US mission to lobby against US review of ties
South Africa’s newly formed government will use an upcoming forum on US preferential trade access to push back against a Senate review of ties between the two countries. The House of Representatives last month passed a law requiring a full assessment off bilateral relations and submitted it to the Senate for approval. South African business lobby groups have warned the legislation threatens to curb trade with the world’s biggest economy...
15 July 2024
How access to US market changed the fortunes of two South African sisters
Two entrepreneurs take traditional African designs and sustainable materials and turn them into international success What started as a pastime desire to sell crafts at local markets, deeply rooted in the South African culture, has since blossomed to become an international business entity for two local women.It took the Mokone sisters, Morongwe "Mo" (37) and Michelle (34), three years only to turn around their home decor business into an...
01 July 2024
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