TRALAC - Trade Law Centre

SA exports to US increase 16% in first nine months

Monday, 12 December 2011

Source: Business Report (South Africa)

South African exports to the US were up 16 percent to $7 billion (R56bn) in the first nine months of the year, compared with the same period last year. Of the total, about $2.7bn qualified for duty-free access under the US-African Growth and Opportunity Act (Agoa).

Figures available on the Agoa.info website show, in the period, the US sold $5.2bn worth of goods to South Africa, leaving the latter with a $1.8bn trade surplus.

The healthy growth in goods imported to the US from South Africa came despite only modest growth in the US economy. Kevin Lings, the economist at Stanlib, said third-quarter growth in the US had been revised down to 2 percent from 2.5 percent.

However, Lings noted that the third-quarter figure was “the ninth consecutive quarterly increase in US gross domestic product and in constant prices the US economy is finally back above the previous peak level of output, which was recorded in the fourth quarter of 2007”.

Agoa, introduced in 2000, liberalised US trade with initially 37, and now 41, sub-Saharan countries to promote African development. It added more than 1 800 tariff lines to those already eligible for duty-free access under the general system of preferences (GSP).

According to the Agoa.info website, “duty-free access to the US market, under the combined Agoa/GSP programme now stands at approximately 7 000 product tariff lines”.

Agoa was extended from its original expiry date of 2008 and it is currently due to end in 2015. Trade economist Eckart Naumann said its term was likely to be extended.

But he noted that the rules, which were set by US policymakers, could be changed to exclude wealthier African countries, such as South Africa.

Naumann said Agoa had proved “a massive benefit” to local car makers and component manufacturers. They sold about $1.5bn worth of transportation equipment into the US in the nine months, up 26 percent in dollar terms on last year’s sales. Almost all benefited from duty-free access under the Agoa legislation.

However, the biggest South African export to the US was the category minerals and metals, which rose 13 percent to $4.1bn in the period. Less than 20 percent of these goods qualified for Agoa benefits, but Naumann said exports such as platinum and diamonds “were already duty free into the US”.

Trade data from the SA Revenue Service showed that South Africa’s biggest export to the US in the period was the category that included precious metals and stones, at R12.3bn; while base metal exports were worth R6.8bn; and mineral products worth R2.6bn: a total of R21.7bn.

Exports in the category that includes vehicles and transport equipment were worth R11.5bn over the period.

Trade data differ between countries because of differences in definition, classification and timing, among other factors. And exchange rate movements in the period complicate the comparisons. The rand fell from an average of R6.8 to the dollar in June to R7.5 in September.

South Africa is the third-largest African exporter to the US. Nigeria tops the list with nearly $27 million of exports, largely oil, in the first nine months; 30 percent higher than in the same period a year ago.

Angola is next with nearly $10bn, also largely crude oil, up 8 percent.

By Ethel Hazelhurst



“ Latest AGOA Trade Data currently available 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: (click each link to view)

  • 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.