SA calls for extension of Agoa

Any attempt by the US congress to stop, or seriously limit, the African Growth and Opportunity (Agoa) policy, would blast African export trade out of the water, according to Andre Erasmus, senior manager at Deloitte, the customs, trade and finance consultants. “Removing it would be an extremely hard blow for beneficiary countries,” he said – while stressing that there was no indication as yet that the Obama government would take such a step. This follows an announcement by SA trade and industry minister Rob Davies that the SA government had put forward a proposal to the US government to roll over Agoa “for a reasonable period of time” – due as it is to come to an end in 2015. In its current form, Agoa allows for the duty- and quotafree entry into the US of about 7 000 product lines from 37 sub-Saharan countries which qualify for Agoa-membership. “The agricultural, motor and textile/clothing industries have been the prime beneficiaries of this export-stimulating policy,” said Erasmus. “And it has not only benefited these as primary industries, but also encouraged a lot of value-added secondary processing – like textiles to clothing, and producing processed foods and canning.” From an SA point of view the main thrust has been on the motor industry, with automotive exports to the US totalling US$2-billion in 2008, although falling back by about 30% due to the global recession last year. Davies recognised this, saying that Agoa had contributed vital encouragement to SA’s automotive industry exports – and problems would arise if the US congress should make any “big departures” from the current Agoa programme.