The US Congress approved Agoa to assist the economies of sub-Saharan African nations and improve economic relations.
Although the African Growth and Opportunity Act (Agoa), a piece of US legislation that grants duty-free access to the US market to more than 1 800 products from many African economies including South Africa, ends on Tuesday, Minister of Trade, Industry and Competition Parks Tau is still optimistic about its renewal.
After visiting Washington DC and New York, the department of trade, industry and competition (dtic) said in a statement that Tau believes Agoa continues to enjoy bipartisan support and he is optimistic about its renewal.
In Washington he engaged with the US trade representative as well as members of Congress. In New York, he supported President Cyril Ramaphosa in engagements with various Republican and Democratic members of Congress.
According to the department, the overall message was that there is still broad support for the renewal of Agoa in Congress across the aisle. “However, questions remained on the period of renewal, the timing of when it will be renewed and also the legislative vehicle for renewal.”
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Agoa could be renewed for up to three years
On the period of renewal, the consensus suggests, according to the dtic, that Agoa may be renewed for a short period of one to three years to allow Congress to introduce changes and improvements to the programme.
The timing of the renewal of Agoa will depend on the legislative vehicle that Congress chooses to renew Agoa, the dtic says. Some members of Congress cautioned that Agoa may expire on Tuesday, but efforts will be made to renew it as soon as possible.
Congress is seized with a Continuing Resolution Bill to pass funding for government and avoid a shutdown – so Agoa is not top of mind now.
The dtic says South Africa continues to work with Agoa-eligible countries coordinated by the African Union (AU) Permanent Mission in Washington DC. Therefore, the African Diplomatic Corps wrote a letter to relevant congressional committees advocating for the urgent renewal of Agoa through the Offices of the Dean and the AU Permanent Mission.
“South Africa, through its embassy in Washington DC, supported by the dtic, continues to engage with all relevant stakeholders, including Congress, to advocate for the renewal of Agoa with South Africa retained in the programme,” Tau says.
“Our priority is to get Agoa renewed even if it is for a short period to support South Africa’s exports to the US.”
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Agoa’s benefits for South Africa
According to US International Trade Commission data, SA-US total bilateral trade amounted to $20.4 billion in 2024, with SA exports totalling $14.6 billion, while South Africa’s imports amounted to $5.8 billion.
Agoa, including the generalised system of preferences, accounted for 28% of South African exports to the US, amounting to $4 billion, while the most favoured nation regime accounted for 72% of South Africa’s exports to the US.
The dtic says if Agoa is not extended by Tuesday, South African exports will be subjected to the most favoured nation tariff, as well as the unilateral tariffs. “However, whatever happens, South Africa will continue to lobby for the extension of Agoa.”
The major South African exports under Agoa include automotive, ferro-alloys, citrus, jewellery, nuts, chemicals, wines, engines and turbines, and ships and boats.
The dtic says that 36% of South African exports to the US are currently exempted from the unilateral tariff of 30%. The list of products exempted from the unilateral tariffs include copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, stainless steel scrap and energy products.
