On 07 November 2023, the Department of Trade, Industry, and Competition (the dtic) issued a media release following South Africa’s hosting of the 20th Africa Growth and Opportunity Act (AGOA) Forum from 02 to 04 November 2023 in Johannesburg. The media release reads:
The forum brought together over 5 000 participants comprising ministers of trade and their senior officials, the United States of America (US) Government delegation led by US Trade Representative (USTR) Ambassador Katherine Tai, US Congressional staffers, private sector, organised labour, civil society, exhibitors in the ‘Made in Africa Exhibition’, procurers and investors.
The Forum was officially opened by President Cyril Ramaphosa, who started with a tour of the ‘Made in Africa Exhibition’ which showcased industrial products and regional value chains that have formed in the continent. President Ramaphosa noted that “the extension of AGOA could also encourage the further development of value-chains across different countries”. Using the automotive sector as an example of regional value chains, President Ramaphosa indicated that local automotive companies sourced leather seats from Lesotho, wiring harnesses from Botswana, copper wiring from Zambia, steering wheel components from Tunisia and rubber from Cote D’Ivoire, Nigeria, Malawi, Ghana and Cameroon.
Prior to the AGOA Forum, the African Trade Ministers met and agreed on a common position calling for the US to extend AGOA for at least 10 years when it expires in 2025, with all existing AGOA-eligible countries retained in the programme. The ministers also called for an early renewal of AGOA in order to ensure certainty and predictability for investors and buyers, and not put AGOA benefits at risk. In addition, the ministers called for the retention of all current AGOA beneficiary countries so as to preserve existing value-chains and to build on these to support Africa’s industrialisation efforts.
The forum reaffirmed the strategic and mutually beneficial nature of AGOA, and it was noted that trade with the African continent supported 155 000 jobs for the US, while promoting economic links between Africa and the US. There was also recognition that AGOA is a landmark law supported on a bipartisan basis, that has formed a bedrock for US trade with sub-Saharan Africa for more than two decades. There was thus broad support for the continuation of AGOA from all participants, including the private sector, civil society and organised labour.
The renewal of AGOA was further supported from the US side through video messages by the Secretary of State Antony Blinken, as well as three members of Congress namely, the Chair of the Senate Finance Committee Senator Ron Wyden, Senator Mike Crapo, Ranking Member of the Senate Finance Committee, and Chair of the House Ways and Means Committee Representative Jason Smith. This follows a statement by President Biden on 01 November 2023, strongly supporting the reauthorisation of AGOA and encouraging Congress to reauthorise AGOA in a timely fashion. Further, in September 2023, Senator John Kennedy introduced a bill calling for the extension of AGOA for 20 years, from 2025 to 2045. This indicates that the renewal of AGOA enjoys bipartisan support among members of Congress from both the Republican and Democrat sides, as well as between the Biden Administration and US Congress.
In order to address the challenge of underutilisation of AGOA preferences, the African ministers called for the need to complement AGOA with an investment-led strategy into the productive sector in the African continent to ensure that Africa is able to move up the value-chain, including promoting value-addition and beneficiation of critical minerals on the African Continent. AGOA, through its rules of origin, allows AGOA-eligible countries to source inputs from each other, hence contributing to the development of regional value chains, which support regional integration and implementation of the African Continental Free Trade Area (AfCFTA). There is an opportunity for AGOA to complement the AfCFTA and industrialisation efforts on the continent.
The ‘Made in Africa Exhibition’ demonstrated the contribution of AGOA to the emerging regional value chains in the African continent and showcased the manufacturing capabilities of the continent in a number of sectors such as automotive, textiles and clothing, and agro-processing, among others.
Discussion will continue in Washington towards timeous reauthorisation of AGOA, considering the rich discussions and ideas that were shared at the forum. South Africa stands ready to engage with all parties towards meeting this objective.