'Time to capitalise on renewed Agoa benefits'

With the African Growth and Opportunity Act (Agoa) renewed for another ten years South African exporters now have to turn opportunity into real benefit by getting a foothold in the often difficultto- penetrate American market. According to Matt Conroy, trade manager of Maersk Line South Africa, now is the time for exporters to take full advantage of the agreement that opens up markets in Africa and makes it easier for local businesses to sell their products in America. Whilst Agoa has been the cornerstone of the US/African trade relationship for 15 years, its renewal provides muchneeded certainty for African producers, said Conroy. “It also brings certainty for US buyers and investors. The free trade agreement liberates market access to the US, but it also sparks long-term foreign direct investments which in turn will equate to job creation across various industries in South Africa.” According to the Department of Trade and Industry (dti), South Africa has been a significant beneficiary of Agoa to date, especially in sectors such as vehicles, mineral and metals, chemicals and agricultural products. At least 62 000 jobs were created in the country as a result of Agoa. “The question that now has to be asked and answered is how do we capitalise on this going forward,” said Conroy. “When trade barriers are brought down with agreements such as Agoa, conducting business becomes easier and trade becomes more abundant. In the case of the Agoa agreement there is major potential for investment into South Africa, but exporters can now target one of the biggest consumer markets in the world. There are 300 million consumers in the US. If a South African exporter can access only 0.1% of that he is going to be making an impact on his business locally.” Conroy said Agoa was a major opportunity for small to medium businesses. “The American market is interested in what Africa has to offer and South African products in particular are gradually making their way onto the retail shelves which was nearly unheard of ten or 15 years ago. This truly is a foot in the door. Of course exporters still need to produce a product at an affordable cost and have someone on the other side to purchase it.” Conroy said another advantage was that many of the goods shipped to America were manufactured. “That is good for the economy and increasing the export of manufactured goods should be high on the South African agenda.” He said from a liner perspective there was much excitement about growing the US/Africa trade lane. “Vessels from South Africa to the US are typically not full and so we have smaller vessels on this trade that are more costly to run. From our business point of view growth on this trade will allow us to bring in bigger vessels while more volumes will also mean we can increase our service. The benefits of Agoa are all round.” In 2014 at least 38% of South Africa’s total exports to the US went under Agoa amounting to $3.1 billion. INSERT & CAPTION If a South African exporter can access only 0.1% of the 300 million consumers in the US he is going to be making an impact on his business locally. – Matt Conroy