APA-Johannesburg (South Africa) US Senator Chris Coons has proposed a draft bill that would require an immediate “out-of-cycle” review of South Africa’s eligibility for the African Growth and Opportunity Act (AGOA), according to reports monitored here on Tuesday.
A member of the US Senate’s Foreign Relations Committee, Coons late Monday released – for discussion – the AGOA Renewal Bill of 2023 in which he proposes that the US Trade Representative Katherine Tai should “undertake an immediate out-of-cycle review of South Africa.”
No reasons were provided for the call for a review of South Africa’s eligibility in the AGOA programme.
Established by the US Congress in 2000 and renewed in 2015, the AGOA programme provides tariff-free access to the US market for exports of most products from 35 eligible countries in sub-Saharan Africa.
Eligibility depends on favourable annual reviews of a country’s trade and investment policy, governance, worker rights, human rights, and other conditions.
“Out-of-cycle” reviews can be initiated through petitions by any US lawmaker or economic grouping to determine whether a beneficiary African country still meets the eligibility criteria set out in the AGOA Act.
South Africa has been the biggest beneficiary of AGOA, but recently influential members of Congress, including Coons and Republican Senator Jim Risch, have questioned Pretoria’s eligibility because of its warm ties with Russia, which are deemed to threaten US national security and foreign policy interests, violating an AGOA condition.
The possible exclusion of South Africa from AGOA would have far-reaching negative ramifications on the country’s economy and international relations.
AGOA has provided considerable benefits to South African exporters of cars, fruits and wine, in particular.
In the same draft Bill, Coons proposed the extension of AGOA by a further 16 years – instead of the usual 10 years – to 2041, arguing that this would provide US businesses with the predictability needed to invest in sub-Saharan Africa at a time when many American firms are looking to diversify their supply chains and reduce dependence on China.
Increased investment by US businesses in Africa would support regional economic growth and development and strengthen the US’ position on the continent, he argued.
The AGOA dispensation is due to come to an end in 2025.
Coons also wants AGOA’s rules of origin modified to allow inputs from North African countries that are members of the African Continental Free Trade Area (AfCFTA).
Signed in 2018, the AfCFTA is intended to foster trade and spur economic integration and growth throughout the continent.
While AGOA is limited to sub-Saharan African countries, Coons proposed that the AGOA Renewal Act would modify AGOA’s rules of origin to allow inputs from North African AfCFTA members to count toward the requirement that 35 percent of an eligible product’s value originate in Africa.
This change would help AGOA reinforce the AfCFTA’s promise to develop intra-African supply chains, he said.
Importantly, to participate in the expanded rules of origin, North African countries would be required to meet AGOA’s eligibility requirements related to governance, human rights, and foreign policy.
JN/APA