Agoa renewal unlikely before 2025 expiry

The reauthorisation of the African Growth and Opportunity Act (Agoa), which provides 35 sub-Saharan African countries with duty-free access to US markets, is unlikely to occur before the 2025 expiration as it is still under consideration by US legislators.

The renewal of the unilateral preference programme established by US law featured prominently in discussions between the US and African ministers of trade during last week’s Agoa Forum.

African countries, including SA, have pushed for an early, lengthy extension of the legislation to provide certainty to investors on the continent.

African countries are also keen on an early extension as the US heads into elections in November in which the Democratic Party’s likely candidate, Kamala Harris, will face off with former US president Donald Trump, who previously pushed for restrictive trade policies and a clampdown on immigration.

The Biden administration has endorsed not only an early renewal of the legislation but also an extension for 16 years.

“As we look at the timelines and all the things that are happening” in the US, the Agoa renewal may be unlikely to happen before the expiration, assistant US trade representative for Africa Constance Hamilton said at a press conference on Monday. “But certainly in 2025 I expect to see it moving,” Hamilton said.

For SA, retaining its status as a beneficiary is crucial. Agoa provides preferential access for about 20% of the country’s exports to the US, or 2% of its shipments globally.

SA was the second-largest Agoa exporter in 2023, behind Nigeria, and the largest exporter of noncrude oil products ($3.6bn in 2023), supplying a range of products, including vehicles, jewellery, chemicals and fruit.

To maintain eligibility for the programme, countries must meet certain political conditions, including supporting democracy, protecting human rights and not acting against US national security and foreign policy interests.

Business Day previously reported that trade, industry & competition minister Parks Tau pushed for the relaxation of eligibility requirements, including setting aside requirements not related to trade.

A statement from the department at the weekend reads that the SA delegation to the Agoa Forum, including Tau and his deputy Andrew Whitfield, welcomed the “support expressed by both the Biden administration and members of Congress for the renewal of Agoa”.