United States is South Africa’s 3rd largest trading partner and our bilateral trade and investment relations are guided by the Trade and Investment Framework Agreement (TIFA). TIFA was signed in 1999 and in 2012 myself and the then United States Trade Representative, Ambassador Ron Kirk signed the amended version.
Myself and the then Deputy United States Trade Representative (USTR) Demetrios Marantis co-chaired the first TIFA Council meeting under the new agreement. TIFA is a vehicle to address issues of bilateral concerns and boost our bilateral trade and investment relations.
We came to the US to participate in the TIFA Council meeting with the USTR and to advocate for the renewal of the African Growth and Opportunity Act (Agoa) with South Africa included. The South African delegation comprises of senior government officials, business, and labour.
AGOA is the cornerstone of bilateral relations between the United States and Sub-Saharan Africa (SSA), as it provides the sole platform between the US and SSA to discuss ways and means to deepen trade and investment relations. It is for this that South Africa together with SSA countries have been calling for 15 year renewal of AGOA for all eligible countries without any conditionalities. The Africa Growth and Opportunities Act (AGOA) is a non- reciprocal preferential scheme.
We are of the view that AGOA played a role in promoting bilateral trade and investment amongst South Africa, United States, and Sub-Saharan Africa (SSA). The benefits of AGOA are two-way and that is why it is important to renew the programme for all eligible countries with South Africa included as a beneficiary country.
US President Barack Obama, during his state visit to South Africa, offered his endorsement, saying that it represented good business for both Africa and America. Even congress members they all believe that AGOA should be extended; it is the only programme that continues to enjoys bipartisan support. For us as the African continent we believe the programme should be extended for 15 year renewal for the following reasons:
AGOA’s achievements amongst others include the following:
- Total two-way trade between South Africa and the United States increased from R56, 7 billion in 2001 to R141 billion in 2014. Bilateral trade recovered beyond the pre-crisis figure of R127 billion in 2008 (which declined to R83 billion 2009).
- South Africa’s exports to the US grew from R30 billion in 2001 to R69, 8 billion in 2014. Similarly, the U.S. exports to South Africa grew from R26, 6 billion to R71 billion in 2014. Both exports and imports have recovered beyond their pre-crisis level.
- South Africa’s top exports were vehicles & associated transport equipment (representing 27% of total SA exports to the US), precious metal (23%), base metals (11%), mineral products (9%), and chemical or allied industries (16%). These sectors jointly accounted for about 86% of South Africa’s total exports to the US in 2014. However, metal and mineral exports accounted for 43% of total South Africa’s exports to USA.
- USA’s top exports to South Africa were machinery and mechanical appliances; vehicles, vessels and aircrafts; chemical products; plastics and optical and medical equipment.
- Sub-Saharan Africa AGOA exports increased from US$12.4 billion in 2000 to the highest peak of US$79.7 billion in 2008. However, in 2012, exports declined to US$43 billion and again to US$34 billion in 2013. This is largely due to significant decline in oil exports.
Our message is that AGOA has generated enormous good will for the US in the continent and if renewed more can still be done. The attitude of the South African Government remains one of constructive engagement on all the concerns raised by the US constituencies including on the chicken issue. Our Deputy President Cyril Ramaphosa has also indicated to US Vice President Joe Biden, during a teleconference call on 13 April 2015, that SA is serious about reaching an agreement to grant some market access for US chicken bone-in cuts and remains committed to the process.
Our industries are engaging on this issue and we are of a view that a settlement will be reached soon. While I’m in Washington I will also be meeting with Senators Chris Coon and Johnny Isakson, who continues to advocate for an amicable solution on the chicken issue.
The South African delegation has also met with AGOA civil society and Think Tanks, to share views on the renewal of AGOA and there was an overwhelming support for the timely renewal of AGOA for all eligible countries.
Minister Davies addressing the media in Washington
Enquiries:
Sidwell Medupe, Departmental Spokesperson
Cell: 079 492 1774
Tel: 012 394 1650
E-mail: MSMedupe@thedti.gov.za
Twitter: @the_dti
