- African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/South Africa hits AGOA ball back into US court

South Africa hits AGOA ball back into US court

South Africa hits AGOA ball back into US court
Rob Davies
Published date:
Wednesday, 07 October 2015

South Africa 'should not be excluded from the African Growth and Opportunity Act (Agoa) as it has done everything it can to address the concerns of US businesses about the openness of the local economy for their goods', says Trade and Industry Minister Rob Davies.

"We have addressed their concerns, including on chicken import quotas. The ball is now in the US’s court," Mr Davies said while acknowledging that the US could "in whole or in part exclude SA from Agoa benefits, but we think we should continue to be part of the arrangement and we hope that will be the outcome of the review".

His comments came as a new study showed SA’s exports to the US and European Union could fall 10% if firms from these countries reduced trade ties in retaliation for SA’s controversial private security bill.

The signing of the Private Security Industry Regulation Amendment Bill into law in its current form was "economically very dangerous", warned independent economist and Gordon Institute of Business Science lecturer Roelof Botha, author of the study.

A section of the bill, which is awaiting President Jacob Zuma’s signature, would require multinational private security companies to reduce their shareholding in local subsidiaries to 49% or less.

The industry fears this would result in a fire sale of assets at less than fair market value.

The bill is at the centre of lobbying by some US congressmen who are pushing for SA to be excluded from Agoa benefits.

Last week US officials said they feared a deepening breach in relations if Mr Zuma signed the bill into law in its present form.

But Security Industry Alliance executive director Costa Diavastos said on Tuesday the fact that the bill had been sitting with Mr Zuma for more than a year meant the government was probably considering the opposition to it.

Implementation of the bill with the clause on 51% local ownership would precipitate trade alienation, which would not only affect exports but could lead to a combined loss in taxation revenues of R52bn, said Dr Botha. This in turn would threaten fiscal stability, he said.

Investments by the big foreign-owned private security companies operating in SA — ADT, Securitas, G4S and Chubb — totalled R4.5bn over the past eight years.

security industry bill parliament640px

The proposed private sector security bill could scare investors


South African Chamber of Commerce and Industry president Vusi Khumalo said the signing the bill into law in its current form would disadvantage SA as an investment destination. The controversial ownership clause set "a dangerous precedent" that could spill over into other industries.

Other issues that had concerned the US trade lobbyists included access by US pork and beef exports, along with content requirements imposed by changes in black empowerment codes; perceived threats to US agricultural exports from the European Union-Southern African Development Community Economic Partnership Agreement; and concerns about the draft Cybercrimes and Cybersecurity Bill.


Read related news articles

US-Africa trade deal turns 25 next year: AGOA's winners, losers and what should come next

The African Growth and Opportunity Act (Agoa) is a landmark piece of trade legislation enacted by the United States in 2000. Its goal is to promote economic growth, development and poverty reduction in sub-Saharan Africa by providing qualifying countries with duty-free access to the US market for over 6,500 products. By eliminating import tariffs and quotas, Agoa aims to stimulate trade, attract foreign investment and foster economic...

06 May 2024

African trade coalition backs AGOA 16-year renewal bill to boost trade prospects

The African Coalition for Trade (ACT) has voiced its support for the African Growth and Opportunity Act (AGOA) Renewal and Improvement Act of 2024 and credits the bill with creating hundreds of thousands of direct jobs in Africa and the US. The AGOA Renewal and Improvement Act of 2024 which was introduced by Senators Chris Coons and James Risch would extend the bill for 16 years until 2041 and continue to boost Africa’s duty-free status as...

18 April 2024

US apparel and footwear industry supports 16 year AGOA renewal

The American Apparel & Footwear Association applauds Senator Chris Coons (D-DE) and Senator James Risch (R-ID) for introducing the AGOA Renewal and Improvement Act of 2024.Currently set to expire in September 2025, AGOA is a pivotal trade preference program that provides duty-free access to the U.S. market, fostering economic growth and opportunity between the U.S. and eligible African countries. This program is the cornerstone of...

11 April 2024

US senators will introduce bill to renew Africa trade pact through 2041 [Download copy]

A bipartisan group of senators will introduce a bill to renew the United States' trade pact with sub-Saharan Africa ahead of its expiration next year, an aide to one of the senators said on Thursday.  [    Download it here and download a summary here] The bill was introduced by Senators Chris Coons, a Democrat, and James Risch, the top Republican on the Senate Foreign Relations Committee. A cross-party group of...

11 April 2024

US manufacturing subsidies for Africa could help revive AGOA

Experts at the Center for Global Development argue that the unconventional approach could bring billions in new trade opportunities and would fit with US “friend-shoring” efforts. The US should pay ‘negative tariffs’ in Africa – essentially targeted manufacturing subsidies – to help revive its faltering African Growth and Opportunity Act (AGOA),  according to a new report from the Washington-based Center for Global...

05 April 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 and African civil society stakeholders seek AGOA extension

A Civil Society Organisation, Network and other stakeholders from across the United States and African Growth and Opportunity Act-eligible countries have petitioned the President of the United States of America, Joe Biden, to consider an extension of the initiative. The CSO made the plea in a letter dated February 16, 2024, titled ‘Petition for Timely Re-Authorisation and Enhancement of the African Growth and Opportunity Act Beyond...

16 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

House Ways and Means Committee leadership statement on meeting with ambassadors from select AGOA countries

Ways and Means Committee Chairman Jason Smith (MO-08) and Ranking Member Richard E. Neal (MA-01) released the following statement after hosting a bipartisan roundtable with Committee members and ambassadors from several African Growth and Opportunity Act (AGOA) countries. AGOA is a U.S. trade program focused on strengthening economic ties between the United States and nations in Sub-Saharan Africa. “We appreciate the ambassadors from...

18 January 2024

You are here: Home/News/Article/South Africa hits AGOA ball back into US court