Aug 03, 2012
SA gears up for Agoa-extension charm offensiveBack
Africa|PROJECT|Africa|America|Brazil|China|India|Russia|South Africa|United States|USD|Products|Western Cape|Barak Obama|Donald Gips|Hillary Clinton|Mfundo Hlatshwayo|Rob Davies|Scott Eisner|Such A Narrow Analysis|Sub-Saharan Africa
© Reuse this
In fact, South Africa's ambassador to the US Ebrahim Rasool has called for a broad-based coalition of government, business and labour to develop a strategy designed at ensuring the extension of Agoa benefits for a "reasonable period" of up to 10 years.
He is particularly concerned with safeguarding South Africa's continued participation, which is being questioned by some observers, who believe that the country's relative development should disqualify it from Agoa’s duty-free access to the US on 6 400 tariff lines.
In 2011, US-South Africa trade recovered to a record $16.7-billion, following slumps in 2009 and 2010 – the trade balance was in favour of South Africa, which exported around $9.4-billion to the US last year and imported $7.25-billion in return.
Rasool, whose engagements with domestic Agoa beneficiaries were held to coincide with Secretary of State Hillary Clinton’s tour of a number of African countries, has indicated that a "war room" has already been established to deal with the issues and that the strategy is being led by his Washington DC embassy staff.
But the former Western Cape premier has also called for the creation of a public-private "war chest", to enable South Africa to undertake targeted lobbying and advocacy initiatives with members of Congress and the Senate, key US government departments, as well as with influential policy think tanks.
“If we wake up on October 1, 2015, without the Agoa provision . . . the consequences for our companies and our country would be enormously unfavourable,” Rasool avers. “That is why we are ringing the alarm bells early.”
Intense advocacy is being planned for the period between late January 2013, when the new administration and the country’s new lawmakers would be in place, and ahead of the “Spring recess” of July 2014, in a bid to ensure there is no uncertainty over the Act’s future ahead of the 2015 deadline.
US ambassador to South Africa Donald Gips warns that, while there is strong support for a rollover of the Act’s benefits within the current President Barak Obama-led administration, South Africa and Africa will need to convince lawmakers that the scheme's continuation is in both Africa's and America's interest.
Gips, Rasool and US Chamber of Commerce VP for African affairs and international operations Scott Eisner all highlight the difficulty experienced in gaining the reauthorisation of the ‘Third Country Fabric Provision’ of the Act as an indication of current political reticence on the issue. Senate approved the provision, which was due to expire in September and whose delay had already resulted in some order cancellations, on August 2.
The "positive story of Agoa needs to be told and told well", Gips argues, while confirming that South Africa's integration into the ‘Brics bloc’ of Brazil, Russia, India and China has some politicians questioning whether South Africa should remain eligible for preferential trade treatment.
There is particular anxiety, Eisner and Gips say, over the fact that rival products from the European Union currently enter the South African market on more favourable terms than is the case for US products.
But Trade and Industry Minister Dr Rob Davies is keen to shift the conversation to the opportunities being presented for US business in Africa’s newfound growth momentum and to the "goodwill" that flows to the US firms as a result of the Agoa preferences.
He is less keen on the conversation being stymied by like-for-like market access comparisons, saying that such a narrow analysis is inadequate in understanding the value of using Agoa to entrench a competitive advantage that has been built up on the continent.
Rasool argues that this goodwill is already evident in Gallup findings that show that sub-Saharan Africa’s approval of the performance of US leadership is far ahead of the results from other regions.
South Africa will seek to elaborate on Agoa’s “virtuous circle” of benefits for Africa and the US through a research project that will be undertaken jointly by government and business in the coming months.
Business Unity South Africa’s trade and investment promotion executive Mfundo Hlatshwayo says the study will seek to highlight Agoa’s benefits to the US and the South African economies, as well as highlight the risks associated with its termination.
Rasool says economic diplomacy, with a focus on the Agoa extension, is currently the embassy’s primary focus. “We have inverted the usual relationship between political and economic diplomacy. Today, fighting for Agoa, trade and investment and tourism constitute 60% of our diplomacy in the US.”
Davies says that, while South Africa would even be keen to extend additional benefits, its main priority is to secure the country’s full participation in an extension under the prevailing Agoa architecture. There is “little appetite”, he says, to divert that focus with attempts at restarting free-trade-area negotiations.
“We have an arrangement that has yielded positive results, an arrangement that can continue to yield positive results and an arrangement which, I argue, is both in the interests of South Africa, Africa and the US.
“If we look more strategically, we look above the ‘irritants’ . . . I think that we have a very positive basis on which to expand and build a stronger and deeper partnership,” Davies states.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Updated 3 hours ago Construction on the bus rapid transport stations for Phase 1A of the Rustenburg Rapid Transport (RRT) project was likely to start before the end of the year, with the construction tenders currently being adjudicated, RRT said on Tuesday. Phase 1A of this four-phase...
Updated 4 hours ago Hundreds of innovators and entrepreneurs have gathered in Cape Town to discuss how to support more innovation in South Africa in a bid to drive the economy forward. Venture capitalists, dealmakers, entrepreneurs and academics have been mingling at the South African...
Updated 4 hours ago South African business leaders were more likely than their global counterparts to encourage creative behaviours and “disruptive processes” to drive innovation, the South African results of the GE Global Innovation Barometer, released on Tuesday, have shown. The 2014...
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
The board of UD Trucks Southern Africa (UDTSA) has announced the resignation of MD Jacques Carelse. Long-time UD employee, corporate planning and marketing GM, Rory Schulz, has been appointed as acting MD while the process started to appoint a new MD. The Japanese...
There is a need to start planning another pumped storage scheme in South Africa. Much work has already been done at a site in the Limpopo province and the project was very close to being put out to tender at one stage. In 2008/9 the National Energy Regulator of South...
The Coega Development Corporation (CDC) is preparing to leverage its strategic coastal position to develop the Eastern Cape economy through proposed aquaculture development zones (ADZs), with a proposed R2-billion project aiming to contribute $278-million to the...
Completion of the ongoing construction of the 102 km Zomba–Jali–Phalombe–Chitakale road, in southern Malawi, has been extended from June to December 15 because of persistent rains and difficulties in paying the contractor. The project is being undertaken by Kuwait's...
The Malawi government has awarded South African firm Fischer Consortium the contract to upgrade the Malawi Road Traffic Information System. The Directorate of Road Traffic and Safety Services at Malawi's Ministry of Transport and Public Works says Fischer...