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Patel expresses confidence about South Africa’s continued inclusion in Agoa

Trade, Industry and Competition Minister Ebrahim Patel

Trade, Industry and Competition Minister Ebrahim Patel

Photo by Creamer Media's Donna Slater

26th October 2023

By: Marleny Arnoldi

Deputy Editor Online

     

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Ahead of South Africa hosting the US-Africa Trade and Economic Cooperation Forum – also called the Agoa Forum – from November 2 to 4, Trade, Industry and Competition Minister Ebrahim Patel on October 26 briefed the media on the state of readiness for the forum, expressing confidence that the South African government’s relations with the US were strong.

Various South African stakeholders have been motivating for the extension and renewal of the African Growth and Opportunity Act (Agoa) US preferential trade framework for the next ten years; however, questions around South Africa’s dalliance with Russia amid its invasion of Ukraine have created uncertainty on whether the US will include South Africa in Agoa’s extension and renewal.

Agoa in its current form is due to expire in 2025.

In responding to concerns about the matter, Patel reiterated government’s position that South Africa was non-aligned with the conflict and hoped for a peaceful resolution. He defended government’s approach to the issue in saying that government had done what any democracy does, to properly investigate.

Getting back to the Agoa discussion, Patel said early certainty about Agoa’s extension would bring enormous confidence for investors.

Participating African countries and regional value chains have benefitted greatly from Agoa since its enactment in 2000, including through access to the US market for African goods.

African countries, including South Africa, view Agoa as a means to promote industrialisation on the continent.

Currently, Agoa allows 35 participating countries to export 1 835 types of goods to the US consumer market, and, in turn, Agoa affords the US access to critical minerals, product value chains and investment opportunities in Africa.

The Agoa Forum, which will be in its twentieth instance, will see the government of the US and those of Agoa-eligible countries, as well as representatives from the private sector, civil society and labour, engaging on trade and investment matters.

South African stakeholders hope that the forum will reaffirm the US administration’s commitment to the African continent and provide opportunities to make Agoa more transformative.

Patel said the forum would be an opportunity to unpack challenges that various exporters on the African continent faced.

He added that the forum followed on various business meetings between the South African and US governments, which included organisations such as Business Leadership South Africa.

More than 160 business participants and trade unions are expected to engage on trade and investment matters, with a total 2 000 participants expected to visit this year’s forum.

Notably, 520 firms, including services, automotive, coffee, and clothing and textiles businesses, will be displaying their products in a “Made in Africa” exhibition, which will showcase the industrial capability on the continent to procurement officers.

The forum will also be open to members of the public on certain days.

Patel emphasised that the forum would also have a “Heritage Walk” activity, showcasing artifacts from South Africa’s history.

He said the forum would be a celebration of economic relationships with a view to upscale and further improve these relationships to create more economic linkages among African countries, particularly as the African Continental Free Trade Area takes shape.

Patel lauded the “outstanding” support from the South African private sector to advocate for Agoa’s renewal, including through sponsorships of the forum by companies such as Standard Bank, Sibanye-Stillwater, Sasol, Pepsico, Vodacom, MTN, Aspen and Google.

Moreover, Business Unity South Africa (Busa) CEO Cas Coovadia told the media that organisations had been aggressively motivating for the retention of the preferential trade regime, adding that it was in the national and continental interest to retain Agoa.

“Agoa shows what business and government have been able to accomplish to collectively grow the economy and create jobs. It has also been instrumental in establishing Africa as a promising trade destination,” he stated.

Coovadia confirmed that Busa would continue engagement in respect of the memorandum of understanding with the US Chamber of Commerce to advance trade between the two regions.

Congress of South African Trade Unions president Zingiswa Losi noted that the Agoa forum would serve in the interest of many African economies and that, should South Africa be excluded from Agoa during its renewal, it would have a devastating impact not only on South African jobs, but jobs in neighbouring countries as well.

“South Africa sits with a 41.1% unemployment rate, of which 60% are young people that are unemployed. Agoa has been important in not only South Africa’s industrial development, but [also in that of] many African States,” she explained.

Black Business Council organised business VP Gregory Mofokeng called for greater localisation on the back of a renewed Agoa agreement, to enable more inclusive growth – which was an imperative in South Africa.

He stressed the importance of maximising the benefits of trade and investment for ordinary citizens and small businesses alike.

US COMMENT

In a separate briefing hosted on the same day, Bureau of African Affairs deputy assistant secretary Joy Basu affirmed that fostering new engagement in Africa is a priority for the US administration and that Agoa has been a cornerstone in the engagement between the two regions. 

She hoped for constructive dialogue during the Agoa forum, including on the issues that exporters still experience, since Agoa is not being used up to its full potential. There is much scope for improved value addition on the continent, she added.

US Trade Office representative for Africa Constance Hamilton agreed, expressing hope that the US Congress would renew Agoa once again and ensure increased support for regional integration in Africa. She agreed with Basu that Agoa could be more impactful and hoped that the forum would bring about effectiveness to the regime, should it be extended or renewed.

"While it has been greatly useful, there is still a lot of work to do to improve Agoa," Hamilton concluded.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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