South Africa has made no secret of the fact that it is planning a charm offensive around the reauthorisation of the Africa Growth and Opportunity Act (Agoa) beyond its September 30, 2015, expiry date. It is also clear that Africa’s largest economy it is not merely prioritising Agoa’s extension, but is also aiming to safeguard its own continued participation as a beneficiary of a scheme that offers duty-free access across a range of tariff lines.

The country reportedly used the recent visit of US President Barack Obama to reinforce the importance of Agoa and Obama responded by saying he hopes to renew and even improve Agoa. During a joint media briefing with President Jacob Zuma in Pretoria, Obama said he would ensure that America’s trade negotiators had a “serious conversation about how we get a win-win formula”.

However, the power to extend Agoa lies not with Obama, but with Congress. Therefore, support from the administration is a necessary, but insufficient, condition for any reauthorisation. For this reason, South African officials are plotting a lobbying strategy that reaches well beyond the administration.

The stakes are high, particularly given that about half of the country’s exports to the US enter free of duty under the programme. In 2012, total trade between the two countries recovered to R122.7-billion, having slumped in the aftermath of the global financial crisis. Bilateral trade, which reached R123.7-billion in 2008, fell to R82.7-billion in 2009.

Importantly for South Africa, trade flows are also relatively balanced – South Africa exported goods worth R61.5-billion to the US in 2012, against imports of R61.2-billion, and the US remained South Africa’s second-largest export destination and third-largest import partner.

In public, South Africa speaks somewhat optimistically of a 15- to 20-year Agoa roll-over. It even talks about areas of possible improvement.

However, government also knows that the extension and South Africa’s continued inclusion are not a foregone conclusion, which is why South African ambassador the US Ebrahim Rasool talks of an Agoa ‘war room’ that has been set up in the embassy.
Trade and Industry Minister Dr Rob Davies also plans to travel to Washington DC later this year to reinforce these lobbying efforts.

Davies says the South African government is alive to the fact that the extension decision rests with individual lawmakers, who have a significant amount of autonomy in extending their support to legislation such as Agoa. He is also acutely aware that some are questioning whether South Africa, which is the largest and most industrialised country in Africa, shouldn’t be “graduated out” of Agoa.

However, South Africa contends that it would be counterproductive for the US to withdraw Agoa benefits from South Africa while continuing to extend the scheme to its regional partners in the Southern African Customs Union and the Southern African Development Community.

South Africa also argues that it is in the interests of the US for the programme to be retained under its current architecture, as material ‘goodwill’ flows to US firms as a result of the Agoa preferences.

It is less keen, though, for the discussion to be dominated by like-for-like market-access comparisons, particularly with the European Union, with which South Africa has a reciprocal free trade agreement. This point is unlikely to escape the attention of US lawmakers, however, and South Africa is going to need to ensure that its arguments are well honed and compelling as the charm offensive begins in earnest.