TRADE TALKS: Department of trade, industry and competition deputy director general Xolelwa Mlumbi-Peter, DTIC deputy minister Zuko Godlimpi and SA's ambassador and permanent representative to the World Trade Organisation Mzukisi Qobo speak to the media after the G20 trade and investment ministers meeting on Friday
Image: NOMAZIMA NKOSI
SA says Agoa (African Growth and Opportunity Act) remains in force despite its September 30 expiry, with US legislators preparing a short-term extension as negotiations continue on a revised trade framework for sub-Saharan markets.
Trade, industry and competition deputy minister Zuko Godlimpi (DTIC) answered questions on the country's trade negotiations with the US after the latter imposed a 30% tariff on SA exports to the US by the Trump administration.
DTIC deputy director-general Xolelwa Mlumbi-Peter said negotiations with the US were ongoing, adding that there were areas where they were making some progress.
"Of course, I think we need to be aware that these are difficult and challenging negotiations, but the negotiations are continuing," Mlumbi-Peter said.
"With regards to Agoa and the expiry and whether this is it, effectively, yes. Agoa expired on September 30.
"There are discussions that are taking place in [US] Congress to look at an extension.
"However, the indications are that it will be a short extension.
"So far the indications are that it will be a straight extension with all members that are party to or eligible for Agoa in sub-Saharan Africa continuing to benefit."
The short extension will be a basis for the sub-Saharan African countries and the US to identify improvements.
The preferential trade agreement gives SA exporters duty-free access to US markets.
Discussions on its renewal are ultimately decided by the US Congress. However, SA has pushed for a multiyear extension of the deal.
"There is an indication that the US would like to see some improvements in Agoa. At this stage, we don't know what the content and substance of those improvements will be," Mlumbi-Peter said.
"But it will be an opportunity within that year to conclude those improvements with a possibility for a further extension of Agoa for some time."
She said SA was continuing to lobby for Agoa's renewal to maintain duty-free access to the US, which gives local exporters a crucial trade advantage despite new tariffs.
"The benefit of Agoa to SA is that it removes the most favoured nation tariff that is normally charged for trading with the US and therefore, there is a margin of preference that we enjoy as countries in sub-Saharan Africa from continuing to benefit from Agoa."
Recent US tariffs have effectively nullified some Agoa benefits, affecting key SA export sectors such as agriculture and motor manufacturing.
Meanwhile, Godlimpi said it was important to note Agoa expired every five years.
"This expiration is not out of character with the norm. The only difference is that the terms of an extension had not been agreed to by the time the deadline came," he said.
"The fact that the US has agreed on an extension means they are committed to negotiating a reviewed Agoa.
"So Agoa is still in action, it is still in force, and the conversation about Agoa is still there, and the point must always be made that Agoa is actually an act of Congress; it's not a unilateral deal by the White House."
Godlimpi said there were two different views in the US -- the one which was being discussed in Congress was to bring back the five-year period or to negotiate a longer period, while the White House preferred a more bilateral approach.
"But even the White House has not kicked it out.