JOHANNESBURG - President Cyril Ramaphosa says South Africa’s exclusion from the African Growth and Opportunity Act (AGOA) is a setback, but also presents an opportunity for the country to change course in its trade relationship with the United States.
AGOA, introduced in 2000 under the Clinton administration, provides eligible sub-Saharan African countries with preferential, duty-free access to the US market.
“We want to focus on a bilateral trade agreement where both parties sit down and negotiate trade rules and mechanisms,” Ramaphosa said.
READ: AGOA exclusion not a catastrophe for SA agriculture, says Sihlobo
“These, in our view, will enforce and reconfirm our own sovereignty and the sovereignty of the United States,” he added.
South Africa and Rwanda were excluded from AGOA on Monday. The Office of the United States Trade Representative said the two countries had engaged in practices deemed inconsistent with the programme’s eligibility criteria.
The programme has been particularly important for South African agricultural exports to the US, including citrus, berries, grapes, raisins, wine, fruit juices, apples, pears, apricots and nuts.
Agricultural economist Wandile Sihlobo says the exclusion is not a catastrophe for the sector, noting that the US accounts for about 4% of South Africa’s agricultural exports.
Sihlobo argues that South Africa, as an upper-middle-income country, should have transitioned out of AGOA years ago and pursued a full bilateral trade agreement with the US.
Ramaphosa says there is significant potential for trade between the two countries.
“We prefer that that should be done on a negotiated basis,” he said.
He added that while South African industries had benefited from AGOA, the government had also been working to diversify the country’s trading relationships through the Department of Trade, Industry and Competition.
Ramaphosa said South Africa had expanded its trade relationships with other countries and was not solely dependent on AGOA.
“Whilst we are sad that we have been removed from AGOA, our trade relations with the US continue and we want to get better through bilateral dealings,” he said.