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Minister Dlamini Zuma will lead a South African delegation to the first Africa Ministerial Meeting of the Africa Economic Forum to be hosted by the United States in terms of the provisions of the Africa Growth & Opportunity Act (AGOA) from 29 - 30 October 2001. The delegation will consist of senior officials from the Departments of Foreign Affairs and Trade and Industry.

President Clinton signed the AGOA into law on 18 May 2000 as Title 1 of The Trade and Development Act of 2000. The Act authorises a new US trade and investment policy towards Africa. It was a unilateral initiative on the part of the Clinton Administration and Republican-led Congress that provides the most liberal access to the US market available to any country or region with which the US does not have a free trade agreement. It provides for non-reciprocal trade benefits and opportunities to eligible sub-Saharan African countries for a period of eight (8) years.

The AGOA also calls for the establishment of a ministerial-level US-Africa Economic Forum. The Forum, postponed (4 - 5 October 2001) following the 11 September terrorist attacks in the US, will now take place in Washington, DC from 29 - 30 October 2001.

To date, the US Administration has designated 35 sub-Saharan countries as eligible to benefit under the provisions of the AGOA. For these countries, the AGOA provides for significantly improved access to the US market for products through special (qualified) provisions dealing with textiles and apparel, and an additional number of products eligible for quota and duty-free treatment under the US General System of Preferences (GSP).

South Africa is one of thirty-five (35) sub-Saharan African countries that are designated as beneficiary countries under the general provisions of the Act and, along with only nine (9) other African countries, is also eligible to benefit from the textile and apparel provisions of the Act.

The AGOA is already showing promising results with beneficiary country exports, including oil, to the US up 24% in the first three months of this year compared with the corresponding period last year.

Of the non-oil beneficiaries, SA is taking by far the greatest advantage. An analysis of the US trade statistics indicates that South African benefits from AGOA totalled US$ 135.5 million for the period January to June 2001. Excluding the benefits accrued to participating oil-producing African countries South Africa accounts for some seventy-two (72) percent of total benefits accrued through AGOA. AGOA also added some 1800 additional items to the 4600 already on the GSP list. South Africa had, as of April 2001, shipped at least 18 distinct products (not counting apparel, which is treated separately) using AGOA preferences. These products include mushrooms, nuts, fruit, wine, footwear, cars, vehicle bodies, tableware, and 16 kinds of steel (including several facing anti-dumping actions). A breakdown of trade statistics for specific export sectors reflect the following:

* Agricultural products (2.73% of total AGOA imports); South Africa's share was 99.6%
* Forest products (no benefits accrued to any country)
* Chemicals and related products (0.16% of total AGOA imports); South Africa's share was 79%
* Energy related products (35.43% of total AGOA imports); South Africa's share was 2.6%
* Textiles and apparel (10.53% of total AGOA imports); South Africa's share was 15%
* Footwear (15.27% of total AGOA imports); South Africa's share was 60%
* Minerals and metals (2% of total AGOA imports); South Africa's share was 100%
* Machinery (no benefits accrued to any country)
* Transportation equipment (46.45% of total AGOA); South Africa's share was 100%
* Electronic products (no benefits accrued to any country)
* Miscellaneous manufacturers (0.1% of total AGOA imports); South Africa's share was 95%

The AGOA holds significant opportunities for South Africa and other designated African countries to expand their export base, and by implication manufacturing base, through the preferential non-reciprocal access to the US market that AGOA accords. Furthermore, the legislation opens up investment opportunities in South Africa for foreign and local investors wishing to access the US market with eligible products, as well as for South African businesses wishing to invest in African countries, particularly those that are designated as lesser-developed.

The forthcoming AGOA Ministerial attended by Minister Zuma will be very important in engaging the United States on the impact the legislation is having on trade (exports) and investment levels. It is at this forum that African countries are expected to provide their assessments of the benefit of AGOA to date, and to make recommendations on ways to expand the benefits.

For further information, contact Ronnie Mamoepa at 082 990 4853

Issued by the Department of Foreign Affairs, 28 October 2001