An act aimed at extending the US’s African Growth and Opportunity Act (Agoa) by one year has been passed by the US Senate and will be sent to President Donald Trump’s office for approval.
Minister of trade, industry, and competition Parks Tau said the extension would provide South African exporters with some relief as they seek to extend their access to the American market for their products under the scheme.
“The Agoa extension comes at a time when South Africa continues to engage constructively with the US on an Agreement on Reciprocal Tariffs (ART), which seeks to reduce the 30% tariff imposed by the US on goods exported from South Africa,” said Tau.
Agoa, an act of the US government established in 2000 to grant African goods access to the US consumer market, lapsed in September last year amid diplomatic and trade tensions between the US and South Africa, characterised by unilateral tariffs from the US and discredited falsehoods of a white genocide in South Africa peddled by Trump.
Tau said that while the extension of Agoa gives South Africa breathing room to secure a long-term trade deal with the US, the country had always been clear that a longer extension to Agoa would bring stability to trade relations between the US and the African continent.
“We are, however, concerned by the short nature of the extension, and we hope the US will use this opportunity provided by the short extension towards a programme that will provide certainty around investment and purchasing decisions. Agoa was designed to promote export diversification and encourage investment.”
Economists have welcomed the passage of the Agoa Extension Act by the House of Representatives and the US Senate but have warned that South Africa is not out of the woods yet, as Trump could still exclude the country from participating in Agoa by executive order or impose tariffs that would nullify Agoa’s benefits.
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