African Trade Ministers raise concerns at AGOA Forum

Friday, July 13, 2018

African Trade Ministers have raised concern with the erosion of Africa Growth and Opportunity Act (AGOA) Forum preferences.

“The African Ministers also raised a concern with the erosion of AGOA preferences resulting from the recent Section 232 measures on steel and aluminium, and possibly on automotive and auto components,” said the Department of Trade and Industry (dti).

Participating in the opening day of the 17th AGOA Forum in Washington DC on Wednesday, the Ministers called on the US to exempt sub-Sahara Africa exports from Section 232 measures.

US President Donald Trump has signed proclamations granting permanent country-exemptions to a select number of countries and extended by one month the Section 232 steel and aluminium tariff duty exemptions for some.

The proclamation follows the 8 March proclamation signed by President Trump to impose a 10% ad valorem tariff on imports of aluminium articles and a 25% ad valorem tariff on imports of steel articles. This excluded select countries namely Canada, Mexico, the European Union, South Korea, Australia, Argentina and Brazil.

In May, the South African Cabinet expressed its disappointment at the decision by the United States not to exempt South Africa from the application of steel and aluminium duties.

“The Ministers noted with concern the emergence of trade wars, which will have negative implications for global trade, especially African countries,” said the department.

Africa positioning itself for better integration

During discussions at the forum, African Ministers emphasised the strategic importance of the African Continental Free Trade Agreement (AfCFTA) to African countries and the need for AGOA to support this objective.

AGOA is a unilateral US trade preference programme that provides duty-free, quota-free treatment for over 6 400 tariff lines from 40 AGOA-eligible sub-Sahara African countries, including South Africa, into the United States market.

The Ministers emphasised the development integration agenda that combines market integration, industrialisation and infrastructure development in boosting intra-Africa trade. They said AGOA remains critical in developing regional value chains that are beginning to emerge on the continent.

South African Trade and Industry Minister Dr Rob Davies said the AfCFTA is a game changer for the continent, as it promotes structural transformation through development integration.

The core objective of the African countries is to move away from being exporters of primary products and move up the value addition chain.

The Ministers at the AGOA Forum underscored the need for the African Union (AU) member states to develop a common position on trade and investment relations with the US. They also spoke of the importance of engaging the US as a bloc, with a view to ensure alignment to the integration efforts of the African continent.

 “The increase in intra-regional trade supports the emergence of regional value chains and increased productive capacity in Africa. This presents opportunities for cooperation at a practical business-to-business level, with the US on infrastructure and industrial development towards a partnership that is mutually beneficial to both sides,” said Davies.

Civil society and the private sector also submitted recommendations to the forum.

Civil society recommended, among others, that the US government must ensure that regional economic integration projects advance industrialisation and encourage backward and forward linkages, technology and skills transfer to help develop local value chains, in line with international standards on human rights, labour laws and gender equality.

Promoting e-commerce

Davies is participating in the AGOA Forum with the Minister of Small Business Development, Lindiwe Zulu.

Zulu co-chaired a session with the Deputy Associate Administrator of the Small Business Agency, Eugene Cornelius, titled ‘Facilitating US-Africa Small Business Trade through e-Commerce’.

Zulu’s participation aims to promote cooperation towards promoting inclusive e-commerce that promotes the structural transformation of African countries and to tap into the 4th Industrial Revolution.

The AGOA Forum is an annual forum taking place on an alternating basis between sub-Saharan Africa and the United States. The theme for this year’s two-day forum, which concluded on Thursday, was ‘Forging New Strategies for US-Africa Trade and Investment’. -