AGOA has generated good will, says Minister

Thursday, April 16, 2015

Pretoria - The African Growth and Opportunity Act (AGOA) has generated enormous good will for the US in the African continent, Trade and Industry Minister Rob Davies says.

“Our message is that AGOA has generated enormous good will for the US in the continent and if renewed, more can still be done. The attitude of the South African government remains one of constructive engagement on all the concerns raised by the US constituencies, including on the chicken [trade] issue,” said Minister Davies on Thursday.

AGOA is a legislation that provides duty-free market access to the US for qualifying sub-Saharan African countries by extending preferences on more than 4 600 products.

The Minister and a delegation of business, labour and government officials is in Washington to advocate for the renewal of AGOA. The delegation is in the US for the Trade and Investment Framework Agreement (TIFA) talks with the US Trade Representative to advocate for the renewal of AGOA.

“Our Deputy President Cyril Ramaphosa has also indicated to US Vice President Joe Biden, during a teleconference call on 13 April 2015, that SA is serious about reaching an agreement to grant some market access for US chicken bone-in cuts and remains committed to the process,” said the Minister.

The US is South Africa’s third largest trading partner, with bilateral trade and investment relations being guided by TIFA, which was signed in 1999. The amended version was signed in 2012.

The Minister and the then Deputy United States Trade Representative (USTR) Demetrios Marantis co-chaired the first TIFA Council meeting under the new agreement. TIFA is a vehicle to address issues of bilateral concerns and boost bilateral trade and investment relations.

“We came to the US to participate in the TIFA Council meeting with the USTR and to advocate for the renewal of AGOA with South Africa included.”

AGOA is the cornerstone of bilateral relations between the United States and sub-Saharan Africa (SSA), as it provides the sole platform between the US and SSA to discuss ways and means to deepen trade and investment relations.

“It is for this that South Africa, together with SSA countries, have been calling for a 15-year renewal of AGOA for all eligible countries without any conditionalities,” said Minister Davies.

He said AGOA played a role in promoting bilateral trade and investment amongst South Africa, the US  and SSA.

Mutually beneficial agreement

The Minister said the benefits are two-way and that it’s important to renew the programme for all eligible countries with South Africa included as a beneficiary country.

Minister Davies said during a state visit to South Africa, US President Barack Obama offered his endorsement, saying AGOA represented good business for both Africa and America.

“Even congress members believe that AGOA should be extended. It is the only programme that continues to enjoy bipartisan support. For us as the African continent, we believe the programme should be extended for 15 years,” said the Minister.

Among the achievements of AGOA is that total two-way trade between South Africa and the US increased from R56.7 billion in 2001 to R141 billion in 2014.

In addition, South Africa’s exports to the US grew from R30 billion in 2001 to R69.8 billion in 2014. Similarly, US exports to South Africa grew from R26.6 billion to R71 billion in 2014. Both exports and imports have recovered beyond their pre-crisis level.

South Africa’s top exports were vehicles and associated transport equipment (representing 27% of total SA exports to the US), precious metals (23%), base metals (11%), mineral products (9%) and chemical or allied industries (16%).

These sectors jointly accounted for about 86% of South Africa’s total exports to the US in 2014. However, metal and mineral exports accounted for 43% of South Africa’s total exports to the US.

The US’ top exports to South Africa were machinery and mechanical appliances; vehicles, vessels and aircrafts; chemical products; plastics and optical and medical equipment.

Meanwhile, sub-Saharan Africa AGOA exports increased from US$12.4 billion in 2000 to the highest peak of US$79.7 billion in 2008. However, in 2012, exports declined to US$43 billion and again to US$34 billion in 2013. This was largely due to significant decline in oil exports.

The Minister is also due to meet with Senators Chris Coon and Johnny Isakson, who continue to advocate for an amicable solution on the chicken issue.

This as South Africa has for quite some time had in place an anti-dumping duty on chicken portions coming from the US. - SAnews.gov.za