Obama Agoa comments welcomed

Obama Business

Pretoria – Business has welcomed the support given by the US to extend the African Growth and Opportunity Act (Agoa) beyond 2015, the South African Chamber of Commerce and Industry (Sacci) said on Monday.

“Sacci welcomes the support given by the US President Barack Obama to extend AGOA beyond 2015. Sacci is heartened by the principled stand of President Obama that open trade can be mutually beneficial,” Sacci chief executive officer, Neren Rau, said.

Agoa allows South Africa and certain other African states to export products to America tariff-free.

Sacci said South Africa was highly dependent on the US export market to sustain economic growth and job creation.

“Despite the large gains made over the recent past, substantial portions of the South African economy remain underdeveloped that requires preferential access to foreign markets in order to remain competitive. The severe challenge of high unemployment indicates that Agoa can continue to play a significant role in building the South African economy and reducing poverty.”

South Africa exports a wide variety of products and services to the US.

The US market represents 8.7% of South African exports by value, and more than a quarter (27.5%) of the exports for high value added items such as motor vehicles.

Agoa supports this trade diversification into value added exports with the attendant to high job creation potential.

Sacci hopes the support by President Obama will eventually translate to an extension of Agoa, as this extension requires the approval of the American Congress.

At the weekend, the US President and President Jacob Zuma held a bilateral meeting where they spoke in one voice on matters regarding trade and increased investment on the African continent, which is mutually beneficial.

Following the meeting, President Obama announced that Agoa, which was one of the issues the SA government brought to the table during the meeting, would be renewed, upgraded and improved.

“I want to renew Agoa so that we can generate more trade and more jobs,” Obama told a packed press conference on Saturday.

Trade negotiators, however, still needed to work out the details, Obama said.

Agoa – which expires in 2015 – offers incentives for African countries to continue their efforts to open their economies and build free markets. It has been commended for enhancing African exports to the US.

Obama will today travel to Tanzania for the last leg of his African tour. The US president has thus far visited Senegal and South Africa. He arrived in South Africa on Friday. –