CityPress - - Business -

Agoa, first en­acted in 2000, gives African coun­tries tar­iff-free ac­cess to the US mar­ket for var­i­ous prod­ucts if they demon­strate progress to­wards open­ing their own mar­kets to US com­pa­nies.

While Agoa is called a “uni­lat­eral and non­re­cip­ro­cal” deal that ba­si­cally gives mar­ket ac­cess to Africans, it is also very ob­vi­ously a tool to cre­ate lever­age against African trade poli­cies.

Af­ter run­ning for an ini­tial 15 years, Agoa got re­newed this year with some mod­i­fi­ca­tions.

The hall­mark of the new amended ver­sion of Agoa is greater pow­ers for US in­ter­ests to chal­lenge coun­tries’ in­clu­sion via the “out-of-cy­cle” re­view mech­a­nism South Africa is now be­ing sub­jected to.

The new Agoa also adds the power to se­lec­tively ex­clude sec­tors, in­stead of whole coun­tries, from the tar­iff-free ac­cess. This is a weapon that the US pork in­dus­try is now ask­ing its gov­ern­ment to use on South Africa.

A ma­jor coun­ter­ar­gu­ment by the depart­ment of trade and in­dus­try at the hear­ing was that Agoa would be pretty mean­ing­less if South Africa was not part of it.

Sta­tis­tics around the over­all value of African ex­ports to the US un­der Agoa are skewed by the over­whelm­ing im­por­tance of oil from Nige­ria and An­gola, but if fuel is left out of the equa­tion, South Africa com­pletely dom­i­nates the scheme.

Be­cause South Africa plays a ma­jor role in re­gional value chains, tak­ing the coun­try out of the scheme would have a knock-on ef­fect on the other ben­e­fi­cia­ries and wreck the on­go­ing at­tempts to cre­ate an African free trade zone.

“Re­mov­ing South Africa from Agoa would sub­stan­tially di­min­ish the sig­nif­i­cance of Agoa for sub-Sa­ha­ran Africa and the US,” said the depart­ment.

South Africa’s tar­iff-free ex­ports to the US un­der Agoa amounted to about R20 bil­lion last year, with the roughly 40 000 BMWs es­pe­cially man­u­fac­tured here for the US mar­ket ev­ery year mak­ing up the bulk of that.

The BMWs and auto com­po­nents like plat­inum cat­a­lysts are the only large-scale ad­vanced man­u­fac­tur­ing prod­ucts to ac­tu­ally use the scheme.

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