Presentation and Panel Discussion:
Faizel Ismail – TIPS and UCT: AGOA - A Game of Chicken
Malose Letsoalo – Department of Trade and IndustrY
Christopher Wood – TIPS: Making the Best of AGOA through Export Promotion Policies
Tinashe Kapuya - Agricultural Business Chamber: An Agriculture Industry Perspective
The importance of exporting to the US for any developing country cannot be downplayed. Exports to the largest economy in the world along with various support measures has been of cruciall importance to countries such as Japan and South Korea during their industrialisation, more recently for China. The Africa Growth and Opportunities Act (AGOA) recognises the potential benefits of the US market and is a mechanism to encourage African economies to export into that market. While AGOA is a unilateral agreement by the US it gives benefits to the recipient countries and also is a means to encourage investment by US firms into Africa. The potential to support industrial development is therefore significant and is part of the motivation to extend AGOA by 10 years. Outside of the oil exporters, South Africa is the largest exporter through AGOA. South Africa exports value added products including automotive components and vehicles through AGOA. The recently adopted AGOA, however, specifically required a review of South Africa, mainly as a result of the requirement for poultry and pork imports from the US into the country. The poultry issue has been resolved and a number of compromises reached. The threat of the provisions of the Act that could exclude South Africa still remain. The benefits of South Africa being part of AGOA are applicable to both South Africa and the US,; it is therefore desirable on the side of both countries to find the compromises that would enable that.
The TIPS paper to be presented also forms part of a research project undertaken for NEDLAC.
Faizel Ismail: Dr Faizel Ismail is an Adjunct Professor at the UCT School of Economics and a TIPS Research Associate. He has previously been an advisor to the dti on International Trade and Special Envoy on the African Growth and Opportunity Act and served as the Ambassador Permanent Representative of South Africa to the WTO (2010-2014).
Malose Letsoalo: Malose is the Director of Americas Bilateral Trade Relations in the International Trade and Economic Development Division (ITED) of the Department of Trade and Industry (the dti).
Christopher Wood: Chris is a TIPS economist focusing on trade and industry policy. He previously worked as a researcher in economic diplomacy at the South African Institute of International Affairs.
Tinashe Kapuya: Tinashe is the head of international trade and investment intelligence at the Agricultural Business Chamber (Agbiz).
Date: Tuesday 24 January2017
Time: 13h30 – 16h00
Venue: TIPS Boardroom, 234 Lange St, Nieuw Muckleneuk, Pretoria
RSVP by email: firstname.lastname@example.org to confirm attendance.
This paper reviews the state of play of the African regional integration agenda, inspired by the vision of the Abuja Treaty and Agenda 2063. It argues that the Continental Free Trade Area (CFTA) negotiators should adopt a “development integration” approach to ensure that the outcome of the CFTA benefits all its members. Towards this end, the CFTA negotiators should work on three parallel tracks: a) they must ensure that the architecture of regional integration is asymmetrical in favour of the Small, Vulnerable Economies (SVEs) and the Least Developed Countries (LDCs); b) they must prioritise the fullest participation of all Africa’s members in regional productive value chains that enhance Africa’s industrialisation; and c) they must facilitate the co-operation of member states towards the building of cross-border infrastructure. It is argued that this vision and agenda of the CFTA and Agenda 2063 provide Africa with a powerful negotiating mandate to drive the process of engagement between Africa and its main trading partners, multilaterally in the World Trade Organization (WTO) and bilaterally with the European Union (EU), United States (US), China and others.
This policy brief considers the three main options available to South Africa in a post-AGOA trade and investment relationship with the United States: to stay in AGOA, negotiate a Free Trade Agreement, or fall back on Most Favoured Nation terms and the Generalized System of Preferences.