The US House of Representatives this week passed a ten-year extension to the African Growth and Opportunity Act (Agoa), which was due to expire at the end of September.

The legislation was approved along with other trade-preference packages and the Trade Promotion Authority legislation, which granted President Barack Obama the authority to negotiate trade deals.

Cornerstone

US Trade Representative Michael Froman said in a statement that Agoa had been the cornerstone of America’s trade relationship with Africa for 15 years.

He added that its renewal for a ten-year period represented the longest-ever extension in the programme’s history. However, African beneficiary countries, including South Africa, had been hoping for a 15-year extension.

Froman said that the legislation’s “improve- ment and renewal” would “incentivise good governance and pro-growth, pro-development policies, including on labour and human rights, while providing much-needed certainty for African producers, US buyers, and investors”.

Secretary of State John Kerry also welcomed the passage of Agoa, describing it and the other preference programmes passed as “powerful drivers of global development and critical tools in our economic engagement abroad”.

South Africa’s Trade and Industry Minister, Dr Rob Davies, told Engineering News that he was “glad” that Agoa had been extended for a “reasonable” length of time and well ahead of its expiry date.

The Trade Preferences Extension Act of 2015 would now be delivered to Obama for his signature.

Once signed, however, South Africa would face an “out-of-cycle” review that would take place “no later than 30 days after the date of the enactment”.

The review would weigh South Africa’s continued eligibility under Section 104 (a) of the Act, which deals with a beneficiary’s progress towards being a market-based economy with open, rules-based trading and minimal government interference.

Davies said he believed that the review would be far less “acrimonious” than would have been the case had the poultry industries of the US and South Africa not reached the agreement they did at a meeting in Paris, France, in early June.

Review Clause

The inclusion of an out-of-cycle review clause for South Africa in the legislation arose as a result of concerns raised about the “compliance” of “some beneficiary sub-Saharan African countries”, with the poultry issues emerging as the main area of contention for some lawmakers.

The poultry agreement struck in Paris did not eliminate South Africa’s 15-year antidumping duties on American chicken imports, but instead set a 65 000 t/y quota for bone-in chicken cuts from the US. The quota could be increased based on changes to consumption and production conditions in the South African market.