Questions raised about SA's future in Agoa

Amid much relief following last week’s announcement by US Congress that it would extend to September 2015 key textiles provisions of the African Growth and Opportunity Act (Agoa), questions are being raised about South Africa’s future status within the agreement. “The extension of the Agoa third country fabric provisions to September 2015 is nothing short of a lifeline for the garment manufacturing industry in many parts of Africa,” tralac associate Eckart Naumann pointed out in a discussion paper published by tralac recently. “Indications are, however, that the focus of Agoa may be more on the lower-income countries and that countries like South Africa could eventually be graduated out of the programme – not unlike the future EU Generalised System of Preferences,” he said. “There is ongoing debate on whether South Africa in particular, now that it forms part of the Brics bloc and given its relatively higher per capita income, should even remain part of Agoa,” he said. South Africa is currently one of Agoa’s largest beneficiaries, with sectors such as the automotive industry (US$ 2.1bn worth of exports to the US in 2011 or 22% of total US exports) being specific recipients of the dutyfree treatment afforded to qualifying goods. But given the strong trade relationship (South Africa imported US$ 7bn worth of goods from the US in 2011, against US$ 9.5bn in exports) – and growing strategic imperatives – neither country, he believes, can afford to allow the bilateral relationship to weaken