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Saturday, 04 November 2023 21:02

Agoa made a difference to African development as US Congress to decide on extension.

By Lehlohonolo Lehana.

Trade, Industry and Competition Minister Ebrahim Patel has officially closed the 20th Agoa Forum held in Nasrec, South of Johannesburg on Saturday.

Addressing the closing of the Agoa Forum, Patel said this Summit has affirmed the vital partnership between the US and Africa.

"There has been an extraordinary level of support for the continued partnership of Agoa," he said.

Discussions included looking at renewing and refining the Act.

"It was worth making the case that Agoa has made a difference to African development and had a positive effect in the US.

"Agoa is helpful in fostering regional value chains that is important for African countries to coordinate," Patel said.

Patel highlighted that the discussions also looked at the idea of small businesses to small business partnership between the African continent and the United States.

"We looked at the product scope. Is there appetite to increase the number of products covered by AGOA? By way of illustration, we shared with Congressional representatives, an example of 10 products where Africa has capacity, and where Africa has fantastic products, some of which you've tasted in the last few days," he told delegates.

"We recognise we need to balance the level of our ambition on extending the product list against the concerns about the time that may be required to reach consensus in Congress on these factors. While we would obviously prefer as much as possible, we want to avoid such a broad review that we delay reauthorisation," he said. 

Mineral beneficiation on the African continent was also under the spotlight.

"We said we don't want to be the exporter of rocks. We want to be the exporter of consumer and capital goods… and the producers of electric vehicles. And it raises the question of a moment of a grand bargain between Africa and its friends elsewhere in the world, where there's a partnership around critical minerals, but also with processing of critical minerals on the African continent," he said. 

The Minister believes that the African Continental Free Trade Area (AfCFTA) is a game changer.

He explained that AGOA on its own gave the continent significant access on a range of products to the world's single biggest national consumer market. 

"What the AFCFTA will add to that is that the combined weight of access to African markets and access to the US market will give us the scale to draw investment, and scale is what investors look at. They want to be able to see that the size of the market justifies the investment."

The African Growth and Opportunity Act (Agoa) is the United States government's signature trade initiative with sub-Saharan Africa.

US lawmakers are holding talks on whether the act should be extended and which countries should benefit. President Joe Biden has already recommended that congress extend Agoa, calling for a further 20 years. 

The decision now lies with the US Congress as it will go through the legislative process. There, they will consider the outcomes of the forum, that took place over three days in Johannesburg.

The criteria to qualify for Agoa include market-based economies, the rule of law and political pluralism.

The total two-way investment stocks in 2021 came in at just more than $11.9  billion between the two countries, with $7.4  billion in US investment stocks in South Africa while local firms invested $4.5  billion in the US, Patel said. 

The United States of America Trade Representative, Katherine Tai, also addressed the closing ceremony and emphasised that AGOA remains the cornerstone of the U.S. economic partnership with Africa.

"Let us not forget the real impact AGOA has had on real lives, real people: the woman entrepreneur seeking to expand her macadamia nut processing business; the small business owner making apparel and handicrafts, and the countless students and youth, waiting to make their mark on this ever-changing continent," she said.

The US is a significant market for South African goods and a key source of investment, being its second-largest national trading partner after China. South Africa is also the largest single exporter to the US on the African continent.

Meanwhile the Pro-Palestine supporters have called for the ceasefire in the Middle East that has led to thousands of deaths.

The protest took place as the US and several African countries were attending the African Growth and Opportunity Act (Agoa) summit in Nasrec.

The picket was to show support for Palestinians and condemn what the protesters called the US support for the Israeli government in the ongoing war in Palestine.

SAFTU's general secretary Zwelinzima Vavi who led the protests said while AGOA was beneficial for South African exporters, he doesn't believe America should be let off the hook for its allegiance to Israel.

"It is just a shame on Joe Biden, who took such a strong stance against the South African apartheid regime, for him now not to see absolutely anything wrong and to proclaim that they stand on their side. Oh, shame on them all," said Vavi.

Vavi accused the US of using AGOA to silence African leaders.

"It is just unspeakable, that these guys who are now here representing the so-called good interests of trade relations with the African continent, see absolutely nothing wrong that they use their money and their weapons to commit a genocide against women and children," said Vavi.