Rob Davies will try again soon to get the US to stick to Agoa deal
The African Growth and Opportunity Act is a nonreciprocal preferential trade programme the US offers to about 50 sub-Saharan African countries
Trade and Industry Minister Rob Davies will meet US representatives soon in a bid to secure SA’s preferential trade benefits under the US African Growth and Opportunity Act (Agoa)
Department of Trade and Industry director-general Lionel October says the next meeting is in about 10 days’ time.
"We made a compromise, we opened up a bit to poultry in exchange for continued market access under Agoa. Now the US is undoing that deal we had. We are going to keep pushing. We must do it simultaneously. While we try to maintain our access, we’re working with industry to diversify our trade," he said on the sidelines of the second day of the Manufacturing Indaba in Sandton.
SA has been caught in the crossfire in a bruising trade war between the US and China, which has already knocked emerging-market currencies. The rand has plunged to levels last seen during the Jacob Zuma administration.
Former US president Barack Obama extended the Agoa agreement, which was set to expire in September 2015, to 2025. Agoa is a nonreciprocal preferential trade programme the US offered to about 50 sub-Saharan African countries. It was signed into law in 2000 under the Bill Clinton administration.
The first effect of protectionism in the US had been felt with the imposition of higher tariffs on the steel and aluminium industries. SA is a major exporter of advanced aluminium for the aircraft industry.
The US has now turned its attention to the automotive industry, which constitutes 30% of SA’s manufacturing. "Fortunately it’s only one company that’s exposed because many of them export all over the world," October said. He declined to disclose the name of the affected company.
"The impact is not immediate but it will grow," October said, adding that the solution now for SA was to "do what Europe did after the Second World War — they created a common market of 500-million people. We have to look in that direction to create a market size for us to be able to industrialise".
October said President Cyril Ramaphosa was expected to sign the African Continental Free Trade Agreement "in the next few days". This is an agreement of the 55 members of the African Union to create a single market for goods and services on the continent.