Agoa.info - African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/Statement by the US Representative at the Trade Policy Review of the Southern African Customs Union

Statement by the US Representative at the Trade Policy Review of the Southern African Customs Union

Statement by the US Representative at the Trade Policy Review of the Southern African Customs Union
Published date:
Wednesday, 04 November 2015

Statement by Ambassador Michael Froman in Geneva, 4 November 2015

Thank you, Chair. The United States would like to welcome the delegation from the SACU countries, as well as the Executive Secretary of SACU, to this fourth review of the trade policies and practices of the Southern African Customs Union.

We would also like to thank the governments of the five SACU member countries and the WTO Secretariat for the comprehensive reports that they prepared for this review. We note that our delegation submitted written questions in advance of this review and we look forward to receiving responses prior to the completion of the review.

As noted in the Secretariat’s report, SACU member countries have made important strides since the last trade policy review. Since the 2009 global economic crisis, at which time SACU as a whole registered negative growth, SACU member economies have managed to collectively grow at about 3 percent annually on average; albeit, unevenly among individual SACU members. At the same time, we recognize that the SACU member countries continue to face serious challenges that have kept them from achieving their full economic potential. As the Secretariat’s report notes, intra-country inequalities within SACU remain among the highest in the world, with high unemployment and poverty as common challenges.

Since the last trade policy review, the United States is pleased to continue a robust and vibrant trade and investment relationship with each of the SACU countries. Overall, two-way U.S.-SACU trade in goods grew by 40 percent to $16 billion between 2009 and 2014. Each SACU member country has exported a variety of products to the United States under the African Growth and Opportunity Act (AGOA) and the U.S. Generalized System of Preferences (GSP).

AGOA remains the foundation of our economic engagement with Africa, and we are pleased that the Trade Preferences Extension Act of 2015 (TPEA) extended AGOA – including the third-country fabric provision – through 2025, the longest ever extension of AGOA. The TPEA also extended GSP through 2017, thus providing producers, exporters, and investors across sub-Saharan Africa the certainty of duty-free access for a wide variety of products to the U.S. market under both AGOA and GSP.

South Africa has continued to be a significant beneficiary of AGOA. It is the largest non-oil exporter under AGOA, and exports a broad array of goods to the United States under AGOA and GSP, including motor vehicles and parts, metals and minerals, agricultural products, textiles, and chemicals to name a few. Lesotho is a leading exporter of apparel to the United States under AGOA. Botswana exports apparel under AGOA, and Namibia exports worked marble, granite, and wood products under GSP. Swaziland continues to export sugar and other products under GSP, but became ineligible for AGOA benefits in 2015 after failing to take certain necessary steps to protect core labor rights, over the course of several years. All told, over 98 percent of SACU exports to the United States in 2014 entered the U.S. market duty-free.

Additionally, since 2008, the U.S.-SACU Trade, Investment, and Development Cooperation Agreement (TIDCA) has provided a forum for consultative discussions, cooperative work, and possible agreements on a wide range of trade issues, including customs and trade facilitation, technical barriers to trade, sanitary and phytosanitary measures, and trade and investment promotion. We look forward to working with SACU to address how to use the TIDCA as an effective vehicle to discuss the future of the U.S.-SACU trade and investment relationship based on a more mature, permanent, and reciprocal relationship. 

The United States has submitted some questions about policies and processes at both the SACU-wide level and in individual countries. I would like to highlight just a few with respect to South Africa, and then also draw your attention to additional issues of interest to the United States.

With respect to South Africa, I would like to draw your attention to three areas:

  • First, according to the Secretariat’s report, South Africa bases its animal health requirements on World Organization for Animal Health (OIE) guidelines and on risk assessments. In light of South Africa’s commitments under the WTO SPS Agreement, the United States remains extremely concerned regarding South Africa’s non-science based requirements that impact the import of poultry meat from countries affected by highly pathogenic avian influenza (HPAI); import requirements concerning Salmonella in poultry; import requirements for beef; and finally, import requirements concerning animal health issues related to pork, including trichinae, pseudorabies, and porcine reproductive and respiratory syndrome.
  • Second, we remain concerned about policies that may ultimately have a chilling effect on foreign investment in South Africa. In particular, the provision contained within the Private Security Industry Regulation Amendment to require at least 51 percent South African ownership and control of foreign-owned private security firms would negatively affect existing foreign investment in this sector. If signed into law, the bill’s local ownership requirement would create a disturbing precedent concerning firms in a broad range of sectors, and would likely discourage foreign firms, including U.S. firms, from considering new investments in South Africa.
  • Third, we note South Africa’s concern, as stated in SACU’s report, related to a provision contained within the Trade Preferences Extension Act of 2015 that requires an out-of-cycle review of South Africa’s eligibility to receive the duty-free benefits afforded under AGOA. We note that South Africa, like all AGOA-eligible countries, must meet certain eligibility criteria to take advantage of AGOA’s benefits, and we encourage South Africa to take the necessary steps to demonstrate that it is meeting those requirements.

With respect to SACU writ large, we are interested in hearing how plans for wider regional economic integration in Africa might affect SACU’s future, including the recently launched Tri-Partite FTA encompassing the Southern African Development Community, the East African Community, and the Common Market for Eastern and Southern Africa; as well as the African Union’s plans for a Continental FTA also announced earlier this year.

Finally, we applaud Botswana for playing a leadership role within SACU and ratifying the WTO Trade Facilitation Agreement (TFA) and notifying the WTO of its category A commitments. The WTO TFA would set the stage for more efficient customs and border procedures and coordination and encourage regional integration among SACU member countries. The TFA is widely recognized as having broader development benefits in addition to promoting regional integration, private-sector investment, and supporting export promotion. We encourage Lesotho, Namibia, Swaziland, and South Africa to follow Botswana’s lead to accept and implement the agreement as soon as possible. The United States stands ready to work with SACU member countries to ensure their timely implementation of the agreement.

In closing, the United States appreciates the opportunity to participate in this review of SACU’s trade policy, and we look forward to further discussions on trade matters with the delegation from the SACU countries.

Thank you, and we wish you a successful Trade Policy Review.

Read related news articles

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

Business Leadership SA calls for business to capitalise on South Africa’s hosting of AGOA Forum

It is notable that South Africa will still host the African Growth and Opportunity Act (AGOA) Private Sector Forum next month, given that several US lawmakers have called for it to be moved elsewhere, and have questioned the country’s preferential trade terms with the US under Agoa as such preferential access to the US markets is open only to African countries that do not threaten American security interests. This is...

24 October 2023

You are here: Home/News/Article/Statement by the US Representative at the Trade Policy Review of the Southern African Customs Union