The African Growth and Opportunity Act (AGOA) has served as a foundational element for economic interactions between the US and sub-Saharan Africa for over two decades. The potential renewal of AGOA places South Africa at a crucial juncture, facing compliance issues. The allure of the US market remains strong, yet compliance challenges and intricate relations with the US prompt questions about the future. With AGOA's current term ending in 2025, discussions on its extension offer hope to South African exporters who have enjoyed duty-free entry into the US market.
Dr Noluthando Phungula, from the Institute for Pan-African Thought and Conversation, highlights the economic benefits: "In 2022 alone, preferential access under AGOA helped South African exporters avoid a staggering US$116 million [about R2,1 billion] in tariffs." This advantage is crucial for South Africa's manufactured and agricultural exports. South Africa's actions, perceived as counter to US national security and foreign policy, have led to a proposed mandatory review of its AGOA compliance. Misinterpretations in South African media of US government proposals add to the complexities, according to Phungula.
Dr Mmatlou Kalaba, a senior analyst at the Bureau for Food and Agricultural Policy (BFAP), emphasizes that compliance spans beyond trade barriers, including intellectual property, environmental regulations, and foreign policy positions. Kalaba notes the extensive challenges South Africa must overcome to maintain AGOA eligibility, even if the agreement is extended.
Source: farmersweekly.co.za