TRALAC - Trade Law Centre

Swaziland: Textile Industry Under Threat Over AGOA Rule

Wednesday, 31 March 2004

Source: Business Day (Johannesburg)

Agriculture exports from SA to the US rose 35% last year despite the negative effects of the strong rand, contradicting claims that the US's African Growth and Opportunity Act (Agoa) did not benefit South African farmers.

Critics have said that duty-free access under Agoa has "done nothing" to boost sales of African farm produce. African farmers, they say, are still struggling against import quotas and agricultural subsidies in the US.

Subsidies to US farmers about 180bn over 10 years along with nontariff barriers such as food safety requirements, are likely to have a negative effect on exports to the US.

Despite these barriers, however, agricultural exports from SA that qualify for duty-free entry into the US under Agoa rose to $103,3m last year, compared with $76,6 in 2002, according to the US International Trade Commission.

Agri SA and the agriculture department confirmed yesterday that Agoa had boosted sales.

"It has helped us a lot," said Rolf Otto, deputy director of international trade in the department.

Citrus farms are among the domestic agricultural industries that have benefited substantially from Agoa, which allows access of about 7000 products.

SA has, for example, become the single largest foreign supplier of oranges to the US market in less than five years. South African growers supplied 48% of all US orange imports, worth almost $50m last year.

US International Trade Commission data show that several other sectors recorded strong growth in exports under Agoa last year .

Textile and apparel exports under Agoa surged 49% to $127m last year compared with 2002.

The country's automotive sector was the largest user of the US trade initiative. Transportation equipment, such as vehicle components, exported under Agoa to the US last year totalled $643,4m, or about more than R4bn.

This was 31% higher than the 483m worth of transportation goods exported to the US in 2002.

Exports of all products that qualified for duty-free entry into the US under Agoa last year were worth 998m.

Despite the rise, recent research by the South African Institute of International Affairs on agriculture trade found that Agoa had opened "few new opportunities for South African exports" across the board. This was largely because prior to Agoa, US tariffs on South African exports were already very low, the institute said.

The import tariff on South African bottled wine, for example, was just 1,7% or $0,17 on a $10 bottle of wine. "The elimination of this tariff is unlikely to have much effect on the preferences of US consumers," it said.

The institute said, however, that Agoa had opened new markets for some agricultural products. Pear, avocado, pimentos, citrus juice and grape juice exports had realised "phenomenal growth" over the last few years from a very low base.

"What is less clear is whether Agoa has generated any new trade in these products or merely diverted exports away from other markets," the institute said.

SA's negotiators are attempting to lock the Agoa benefits into a free trade agreement that is being negotiated between the Southern African Customs Union and the US that is due for completion in December.



“AGOA Latest AGOA Trade Data on AGOA.info


Click here to view a sector profile of South Africa’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include:

  • AGOA-beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.