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Friday, 23 September 2016

Deepening Trade and Investment Relations post-AGOA: Three Options for South Africa

  Cyril Prinsloo and Charisma Ncube

SAIIA Policy Insights No 36, September 2016

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Economic Diplomacy Programme

As the US and Africa look to engage at the 2016 annual African Growth and Opportunity Act (AGOA) Forum under the theme of ‘Maximizing AGOA Now While Preparing for the Future beyond AGOA’, two pertinent issues come to the fore: leveraging AGOA until this programme of trade benefits expires in 2025, and considering the nature of trade relations post-AGOA. The US is an increasingly important economic partner for South Africa: total trade has nearly doubled since the inception of AGOA in 2001, as has US foreign direct investment (FDI) into South Africa. Considering the changing global conditions over this period, such as the stalemate in World Trade Organization (WTO) negotiations, the slump in global commodity demand and prices, domestic economic stagnation and priorities of promoting exportled growth, South Africa needs to consider its future relations with the US. This briefing highlights key measures South Africa can take to maximise the benefits extended under AGOA until its expiration. At the same time, three options are offered towards a more formalised trading arrangement with the US post-AGOA: a ‘simple’, ‘moderate’, and more comprehensive approach. These options are discussed in a prescriptive manner, highlighting the strengths and weaknesses of each approach, in the hopes of facilitating further research and discussion.

Authors: Cyril Prinsloo and Charisma Ncube

View all of SAIIA's analyses and resources on AGOA here, or click on an infographic below to enlarge.