FILE photo: South Africa hosted the African Growth and Opportunity Act (Agoa) Forum at the Nasrec Expo Centre. Picture: Itumeleng English/ Independent Newspapers
To qualify for and remain eligible for African Growth and Opportunity Act (Agoa), South Africa must work to improve its rule of law, human rights and respect for essential labour norms, according to the National Agricultural Marketing Council (NAMC).
The government agency made this statement in its Annual Performance Plan 2024-25, published yesterday.
Agoa is a US trade act that was passed on May 18, 2000, as Public Law 106 of the 200th Congress. It has been renewed over the years and will expire next year, with renewal options. The legislation significantly expands market access for South Africa to the US.
“While Ago has had a positive impact on the South African agricultural industry, it is still in its early stages, with industries that benefit exporting fresh fruit, particularly oranges, almonds, processed fruit, wine, alcohol, dairy products and fruit and vegetable juice. However, the US is considering numerous other exportable high-value agricultural items from South Africa, most notably avocados, for which negotiations have made great progress,” Namc said.
However, it said political conflicts or misunderstandings between South Africa and the US have caused uncertainty over South Africa’s future eligibility for Agoa.
“Aside from minor trade issues such as chicken in 2015, the Russia-South Africa relationship remains the primary risk for South Africa as an Agoa recipient. Despite these reservations, South Africa hosted the 2023 Agoa in November, despite disagreements between the two countries.
In value terms, South Africa’s exports are close to half of its agricultural output. Specifically, in relation to AGOA, South Africa’s agricultural products found a sizeable market amounting to $648 million (R12.7 billion) in 2022, making up between 5-6% of South Africa’s overall agricultural exports. AGOA is a United States trade act that was passed on May 18, 2000, as Public Law 106 of the 200th Congress. It has been renewed over the years and will expire next year, with renewal options. The legislation significantly expands market access for South Africa to the US.
Commenting on the outcome of the recent 2024 US elections, Professor Raymond Parsons, an economist from the North-West University (NWU) Business School, said the greater risks to South Africa’s overall exports in general - and also whether it will eventually affect the Agoa duty-free benefits in particular - are what is of importance to the South African economy about a Trump victory and the prospect of higher protectionism.
“In the light of the latest American political changes South Africa will, therefore, need to redefine its economic diplomacy with the US in ways that safeguard the basic shared economic interests that we still have with America, regardless of political changes there,” Parsons said.
Parsons said this is also embedded in former President Thabo Mbeki’s recent call for South Africa to review and adjust its foreign policy stances in the light of major shifting geopolitical trends in general.
“Nonetheless, irrespective of the outcome of foreign elections, South Africa’s Government of National Unity (GNU) must continue to prioritise implementing the right domestic policies needed to build South Africa’s economic resilience, ” he said.
He said the way to offset any adverse external trends is to ensure that South Africa’s economic house is in order, so as to achieve higher inclusive growth.
BUSINESS REPORT