Value of Agoa is diminishing, says Rob Davies

Cape Town – The US act that creates economic growth opportunities in Africa was diminishing in value for South Africa, according to dti Minister Rob Davies on Thursday.

Speaking ahead of his budget speech in Parliament, Davies told media that the costs of Agoa (African Growth and Opportunity Act) were going up, it offered South Africa the status quo and said the tariff quotas verse tonnages exported were far apart.

“There was a promise that there would be consideration for market access for Agoa nations, but we have been offered the status quo,” he said.

“The value of Agoa will diminish over time,” he said. “The US is moving away from non-reciprocal concessions to reciprocal agreements.”

He was referring to the issue around poultry imports, which he said “was just but one demand”, adding that the US was seeking trade agreements on the “three meats – poultry, pork and beef”.

US senators Johnny Isakson and Chris Coons, who represent chicken-producing states in their country, threatened to block South Africa from Agoa if it did not lift the import duties.

Agoa to be extended for 10 years

In his budget speech on Thursday evening, Davies said: “The US Senate has now passed a Bill that provides for Agoa to be extended for a period of 10 years and for South Africa to be included.”

He expanded on this during his media briefing, saying it still had to go before the House of Representatives and possible a joint sitting of the two houses.

Davies said that the bill “provides for regular reviews of African countries'" trade and investment policies with an emphasis on the openness to US products, and in the case of South Africa, such a review is scheduled to be held within 30 days of the enactment of the bill”.

“Notably absent, although indicated at an earlier stage as a possibility, is any improvement in the level of access of Agoa eligible countries products to the US market.

“Agoa commitments remain important to sectors such as autos, chemicals and some agriculture, and agro processing and government is working hard to remain a beneficiary of Agoa mindful of the 30 day out of cycle review to which we will be subjected.

“However, the reality is that with the many new conditions and changing dynamics of US trade policy, the value of Agoa is diminishing while its costs are rising.”