Minister of trade, industry and competition Parks Tau has welcomed the approval of the African Growth and Opportunity Act (Agoa) Extension Bill by the House of Representatives in the United States.
The Act was first enacted in 2000 and provides duty-free access to the U.S. market for eligible Sub-Saharan countries and products. It was passed with a 340–54 vote of support. The bill proposes the reauthorisation of Agoa, with all beneficiaries included, for three years until 2028.
According to Tau’s department, the bill will proceed to the Senate for consideration and approval before being sent to U.S. president Donald Trump for approval.
Still a long way to go
“While South Africa, together with other Agoa-eligible countries, has been advocating for a long-term renewal of Agoa with all countries retained in the programme, the current renewal, though short, provides necessary relief to companies in the context of the tariffs implemented by the United States.
“This will provide certainty and predictability for African and American businesses that rely on the programme. The renewal of Agoa will complement and support the implementation of the African Continental Free Trade Area and the creation of regional value chains, while also supporting American businesses that depend on inputs and products imported into the U.S. market under Agoa.”
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SA and Agoa: Trade at a crossroads
Tau highlighted that South Africa values its longstanding trade and investment relationship with the U.S., its third-largest export destination in the world, and a critical partner in driving mutually beneficial economic growth, industrialisation, and job creation.
“Agoa has been important in this partnership for over two decades, supporting thousands of jobs in both countries and contributing to stable supply chains across key sectors, notably automotive, shipbuilding, agriculture, chemicals, and apparel.
“Under Agoa, South Africa’s major exports included automotives, ferro-alloys, citrus, jewellery, nuts, chemicals, wines, engines and turbines, as well as ships and boats. South Africa and the United States continue to engage in negotiations for an Agreement on Reciprocal Tariffs aimed at promoting mutually beneficial trade and investment relations and addressing trade barriers that affect bilateral trade,” the department stated.
James Booth, head of revenue at Verto, said the bill’s passage to the Senate comes at a critical time for African exporters. South Africa, a primary beneficiary of the programme through its automotive and agricultural sectors, has faced months of uncertainty regarding its future eligibility.
For businesses operating in these corridors, the stakes extend beyond tariffs to the very ‘ripple effects’ of trade negotiations, specifically currency volatility and payment liquidity.
“The House vote is a necessary milestone, but for the thousands of African SMEs that rely on these trade corridors, ‘almost’ is not enough. In our previous research on Agoa’s fragility, we highlighted that political uncertainty is a primary driver of currency volatility. When trade agreements hang in the balance, the South African Rand often bears the brunt, wiping out the thin margins of exporters far faster than any headline tariff could,” he said.
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