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African Growth and Opportunity trade agreement under review
Colen Garrow
e African Growth and Opportunity Act is more encompassing than the Generalised System of Preferences, since it broadly doubles the number of product line items that can access US markets duty-free to some 7,500.
e mantra of politics leading economics is loud and clear. Donald Trump’s Republicans have won, on a pledge to ‘make America great again’. e US President- elect has said that to achieve this, more jobs would be createdandthatthetradeagreementsAmericahas with the rest of the world would be reviewed.
If headlights fell on the North American Free Trade Association – of which Mexico is a member, and drew a fair share of political rhetoric on Donald Trump’s presidential campaign – the feeling instinctively is, that it will be a matter of time before African Growth and Opportunity Act (AGOA) also comes under scrutiny, as will the Generalised System of Preferences (GSP). To put AGOA in better perspective, an analysis of US exports to Africa in terms of the GSP must be considered.
a market-based economy, upholding the rule of law, eliminating barriers to US trade and investment, economic policies that reduce poverty, taking measures to combat corruption and bribery, and protecting internationally recognised workers’ rights. e Trade Preferences Extension Act of 2015 was signed into law by President Barack Obama on 29 June 2015, for a further period of ten years, until September 2025. is coincided with the extension of the GSP, until the end of 2017.
A point which needs underlining in the latest version of AGOA, is that South Africa still remains vulnerable to the vagaries in US trade policy in so far as out-of-cycle reviews are concerned. In other words, should the US feel aggrieved by any of its
American politics can be a contact sport, more so when trade agreements are under review that put America rst.
e GSP was established in 1976. It does however not replace AGOA, which was implemented later, in 2001.
e African Growth and Opportunity Act is more encompassing than the Generalised System of Preferences, since it broadly doubles the number of product line items that can access US markets duty-free to some 7,500. e quid pro quo is that African countries need to meet certain criteria – these include making progress towards establishing
preferential o erings, they may be withdrawn much quicker than what was allowed under the older version of the agreement. South African policymakers may consequently proceed somewhat more cautiously than they otherwise would, on matters to do with changes in property, intellectual and land ownership rights, especially in so far as they may a ect vested US interests. Another concern the US had was South Africa’s protectionist trade practices that levied anti-dumping duties on poultry
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