Agriculture

4.    (1)     (a) In 2000 the United States of America (USA) introduced the African Growth and Opportunity Act (AGOA), giving eligible Sub-Saharan countries duty free access into the USA for 6 400 products.  Although the AGOA was initially intended to cover the period 2000 to 2008, it was later extend up to 2015.  In 2015 it was extended for a further 10 years and is due to lapse in 2025.  Although 661 agricultural products are eligible to receive duty-free access under AGOA, South Africa is currently only using 44 of these which make up 56% of South Africa’s agricultural exports to the USA.  Over the period of 2000 to 2022, the total value of South African agricultural exports to the USA increased from R1,08 billion to R9,30 billion in nominal terms which is one of the reasons why South Africa’s agricultural trade balance with the USA is currently R5,75 billion in South Africa’s favour.  Finally, the nominal value of South Africa’s exports receiving AGOA preferences increased from US$417 million in 2001 to US$1 917 million in 2021.

(b) The strong positive agricultural trade balance is evidence of the positive impact of AGOA on South African farmers.  Although agricultural exports will inevitably continue if South Africa loses its AGOA eligibility, it will have a detrimental impact on competitiveness.  In 2014 the calculation was already made that such a step will immediately add an additional R52 million in import taxes to be paid by South African farmers on their exports to the USA.  Hence, it is not only South African farmers whom want to get clarity on the future of AGOA, but also importers in the USA.  For this reason a strong lobby has also developed across the Atlantic to bring surety to the trade environment.

2. (a) South Africa has no Preferential or Free Trade Agreement with the USA.

(b) In 1974 the USA introduced the Generalised System of Preferences (GSP) which reduces duties on thousands of products imported from 119 countries.  South Africa is one of those countries, but the GSP share of the combined AGOA and GSP preferences declined from 55% in 2001 to 23% in 2021.

3. As export subsidies are continuously being curtailed under the rules of the World Trade Organisation (WTO), no support of this nature is available to South African farmers.  However, export certification of animals and animal products are being done by the Western Cape Department of Agriculture and every year Wesgro is leading several business and trade missions to the USA.