Ramaphosa wants Agoa extension for 10-year haul

By Ferial Haffajee

3 Nov 2023

Biden and Blinken support an extension but are in Congress’ hands.

President Cyril Ramaphosa opened the Agoa Forum in Johannesburg with a call for a “long-haul” extension of the duty-free access to the US market for 35 African countries.

The African Growth and Opportunity Act (Agoa), valued at about $4.5-billion a year, is up for renewal by Congress in 2025. US President Joe Biden said on Thursday he “strongly supported” the reauthorisation of Agoa beyond 2025 when it comes up for renewal.

“I strongly support reauthorisation of the African Growth and Opportunity Act – a landmark, bipartisan law that has formed a bedrock for US trade with sub-Saharan Africa,” he said.

“I am committed to expeditiously working with Congress and our African partners to renew this law beyond 2025, to deepen trade relations between our countries, advance regional integration and realise Africa’s immense economic potential for our mutual benefit.”

In a recorded message, US Secretary of State Antony Blinken reiterated the administration’s support.

sa trade us

Ramaphosa asked the US delegation to consider a 10-year extension, though US business interests are lobbying for a much more slimline deal.

“We would like you to consider renewal for a sufficiently lengthy period to embed growth. We can build more capacity and certainty. Shorter periods of extension impede investment. We are going to be here for a long time. Let us make Agoa a long-haul opportunity,” he said, opening a forum of African trade ministers and their American counterparts.

“We remain concerned about trade restrictions on steel, aluminium and citrus fruits,” said Ramaphosa.

Africa can be producers. The world’s forever been selling to us; now it’s our turn to sell to them.

South Africa was at risk of losing the hosting of the forum because of its pally relationship with Russia and the docking of the sanctioned Lady R ship in Simon’s Town. But shuttle diplomacy saved the forum, and relations appear to be on the mend, although America has not sent a senior delegation.

While six African countries got the chop from Agoa, South Africa has maintained its status under which 31% of South African exports to the US get duty-free access, amounting to $2.7-billion in 2021 and slightly more in 2022. South Africa exports cars, jewellery, ferroalloys, fruit and nuts, beverages and spirits to the US under Agoa. Some exports face restrictions and will be the subject of lobbying at the forum this weekend.

‘Not a source of rock, soil and dust’

“Africa has great reserves of critical minerals (for batteries for renewable energy production and electric vehicles among other new economy sectors) and is becoming a highly urbanised and networked population. We are committed to the industrialisation of the continent,” said Ramaphosa. He added: “By moving up the value chain, we create more jobs. We do not want to be defined as commodity producers. Africa is not a source of rock, soil and dust. We want to earn full value on our products.”

Peter Fabricius reported here that the Agoa extension for South Africa is likely to face further headwinds in Congress because of support for Hamas and Russia.

Minister of Trade, Industry and Competition Ebrahim Patel said that trading has been in Africa’s DNA since the empires of Timbuktu, Mapungubwe and Alexandria, but noted that this had been disrupted by colonialism. Trade access deals like Agoa could develop the continent and make it a leading growth region in the following decades.

Agoa is well-used by South Africa, Kenya and Lesotho but needs to be better used by other African countries that need the capacity to meet its exacting import standards. South African pharmaceutical companies such as Aspen want to be able to export vaccines under Agoa, and this is a topic for negotiation.

sa trade us

The automotive sector has enabled regional industrial development because $200-million in car components were sourced across the continent for South African-made cars.

“Africa can be producers. The world’s forever been selling to us; now it’s our turn to sell to them,” said Ramaphosa.

Patel noted that Africa has 17% of the world’s population but only 3% of its trade.

Ambassador Katherine Tai, the US Trade Representative, is a long-time Agoa supporter. “(We want to ensure) the benefits are realised from bottom up and middle out. The US is all out on Africa,” she said, echoing Biden’s recent comments. The US would use Agoa to boost its flagging influence in Africa, where both China and Russia are growing their spheres of economic hard power and political soft power. Tai said Agoa had to be transformed and modernised and that utilisation rates had to be improved. In a recorded message for the Agoa Forum, Blinken said: “Agoa has meant new jobs, new skills and less corruption.”

This week the US cut Uganda, Gabon, Niger and the Central African Republic out of Agoa. Earlier this year, Ethiopia was suspended, while Guinea and Mali also lost their benefits. Uganda passed a draconian anti-homosexuality law, while Ethiopia stopped rights. DM

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‘Not a source of rock, soil and dust’