Latest news with #AfricanGrowthOpportunityAct
Bloomberg
4 days ago
- Business
- Bloomberg
Can Africa's AGOA Trade Deal Survive Trump?
By and Alexander Parker Save Welcome to Next Africa, a twice-weekly newsletter on where the continent stands now — and where it's headed. Sign up here to have it delivered to your email. Recent events in Washington have raised hope that the African Growth and Opportunity Act — which offers preferential access to the US market — isn't dead.
Zawya
24-04-2025
- Business
- Zawya
Kenya's Ruto dangles tax breaks, Agoa to Chinese investors
President William Ruto is dangling a series of incentives for Chinese investors, including tax holidays, ease of repatriating profits, skilled workforce and easier immigration rules. At a meeting with the Chinese business community in Beijing on Tuesday, the President said Kenya's membership in African regional economic blocs, trade agreements such as the African Growth Opportunity Act (Agoa) with the US, and the Economic Partnership Agreement with the European Union could help Chinese exporters reach these markets with privileges similar to Kenyans.'Kenya is open for business,' President Ruto said.'We have every reason for you to invest in our country and I welcome you to come so that we can build, we can grow and witness the making of Africa's next great success story, and we will do this together.'Kenya has also built a big footprint of markets around not [only] just our region, but also globally... You may also wish to know that, under the Agoa arrangement, we have duty-free, quota-free access to the American market, and all this market access infrastructure is available to you in Kenya.'Agoa has helped Kenyan producers of textiles and foreign investors who produce apparael locally to export to the US under certain privileges. But the deal is now facing a bleak future after US President Donald Trump imposed a flat tare tariff of 10 percent on a number of countries that profited from Agoa, including Kenya. Agoa is set to expire in September this year, unless Washington extends it, or replaces it. At the investor roundtable, President Ruto also sold Kenya's regional positioning, touting Nairobi as a gateway to neighbouring markets.'Because of the network of market access that we have built, you can access the East African Community market and the Comesa market, a community that has 26 countries and a population of 730 million people,' he said. Seven Chinese firms signed letters of intent with the Kenya Investment Authority to invest in various sectors of the economy if certain conditions are met. The companies could pump in $500 million if they sign investment agreements. And a lot will depend on what Kenya does to convince them. Nairobi says it will target the Chinese market more, promising incentives on taxes, immigration and secure financial transactions. Starting June, Kenya will conduct a five-province marketing campaign in China, seeking to sell itself as a better investment destination. The actual regions of China are to be announced later, but one of the cities is Changsha in Hunan Province, where Kenya intends to learn and attract investors in running city transportation systems and related smart technology. In early 2026, Kenya will invite Chinese investors to Nairobi 'to showcase the opportunities here, and you can see for yourselves first-hand what these investment opportunities look like,' President Ruto said. President Ruto is also using the visit to seek new funding for his pet projects such as housing, ICT and universal healthcare. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Mail & Guardian
23-04-2025
- Business
- Mail & Guardian
South Africa seeks to have punitive US tariffs dropped
Agriculture Minister John Steenhuisen. Photo:South Africa will push to have United States President Donald Trump's punitive 30% tariff — which has been stayed for 90 days — permanently dropped 'dramatically' or at least to the baseline 10% implemented on the country's major competitors for agricultural exports. Trump On Wednesday, Agriculture Minister John Steenhuisen said an interministerial committee comprising himself, his trade industry and competition counterpart Parks Tau and International Relations and Cooperation Minister Ronald Lamola had been formed to take the 'two pronged approach' of negotiating with the US while also seeking alternative markets for South African exports. 'Clearly there's going to be turmoil ahead and obviously the tariff issues are of great concern to South Africa,' Steenhuisen told a media briefing on the sidelines of a G20 agricultural working group meeting, one of numerous that South Africa will host during its presidency of the grouping. 'A 30% tariff hike on South African products will obviously lead to us not being competitive anymore in that particular market, particularly given that some of our competitors are only settled with a 10% tariff that will essentially price South African agricultural growers, particularly citrus, out of the market.' Steenhuisen said the African Growth Opportunity Act (Agoa), which granted South Africa and other African countries duty free access to the US market for a raft of goods, was 'all but cancelled in name' in the face of Trump's tariffs. He said there was already a global knock-on effect caused by US tariff uncertainty, noting that the International Monetary Fund had lowered its GDP growth forecast on Tuesday for many countries including the US, China and India. Steenhuisen said he and his cabinet colleagues were working on a deal to present to the US to retain competitive access to that market. 'Our plan is to use the next 90 days to approach the United States with some form of deal or package that we could put on the table, and that could take a number of forms but we would seek to retain access to the US market on a favourable basis for South African agricultural goods,' he said. 'Our goal is to have the 30% lowered dramatically, hopefully, to no tariffs. But if we are going to have tariffs, to have it at 10% which will bring some equality against our competitors. 'We believe this will be in the United States interests as well, because they receive world class, excellent quality agricultural products from South Africa and their consumers enjoy our products. They are in high demand, and there will be price shocks for the US consumer if these tariffs start to have the effect that everyone predicts that they would have.' Steenhuisen said the US tariffs and Agoa were not likely to form part of the discussions at this week's G20 agriculture meeting, because many of the countries attending were not beneficiaries under the trade part. '[South Africa has] a two-track system obviously now to negotiate with the United States to try and get a favourable trade deal. For instance, we could be allowed access to the American market for citrus on a counter-seasonal basis. There are concerns Americans have around poultry and pork, and blueberries and we need to look at how we can resolve them,' he said. Steenhuisen said he had appointed an attaché from his department to Washington at the start of the year who was talking with his counterparts regularly about 'how we can smooth out some of the issues and to put a deal on the table'. 'We can't change the American leadership or the American systems … but we can learn how to navigate the new waters and I think that we're all starting to find our feet in that regard,' he said. 'The second prong is to look for alternative markets where we can redirect South African goods, and that is why we've been in Japan and a variety of other countries. We were able to open deciduous fruit [exports] to Thailand, table grapes to the Philippines, and we continue to be on the lookout for new markets. So if Agoa is going to be cancelled, which seems likely, it won't come as a major shock.' Delivering the opening address of the G20 meeting earlier on Wednesday, Steenhuisen said discussions this week would include the promotion of policies and investments that drive inclusive market participation towards improved food and nutrition security, empowering youth and women in agrifood systems, fostering innovation and technology transfer in agriculture and agro-processing and building climate resilience for sustainable production. 'These are not just South Africa's priorities, they reflect a shared global concern. And they speak directly to the [United Nations'] sustainable development goals, the AU's Agenda 2063, and the urgent need to make agriculture part of the solution to today's complex challenges,' he said. 'The benefits of agricultural development have not been shared equally. Not within countries. And not between them. This is our opportunity to rethink the structures that keep the majority of producers — especially women and young people — on the margins of the sector.' He said the agricultural sector was grappling with rising input costs, unpredictable climate shocks and constrained fiscal spaces, the effects of which were being felt most severely by small-scale producers, women farmers and the rural poor. 'Yet within these challenges there is also real opportunity to change the terms of inclusion in agricultural markets, to build resilience not only into our systems, but into our institutions and to connect innovation with impact at the scale and speed that this moment demands,' Steenhuisen added.
Yahoo
24-02-2025
- Business
- Yahoo
Uncertainty grows over future of Africa-US trade deal under Trump
Africa policy watchers in Washington, DC, are increasingly skeptical about the future of the African Growth Opportunity Act (AGOA), a trade deal that offers sub-Saharan African countries duty-free access to the US market. The 25-year-old free-trade program, set to expire in September, is unlikely to survive in its current form, Capitol Hill staffers and analysts told Semafor, as US President Donald Trump pursues a policy of introducing tariffs with longstanding free trade partner nations. One congressional staffer, who spoke to Semafor on condition of anonymity, said they viewed AGOA as '80% dead.' News that four Republican Congressmen this month called for South Africa to be ruled ineligible for AGOA over geopolitical concerns has only added to the uncertainty. Zainab Usman, director of the Africa program at the Carnegie Endowment for International Peace, said she was 'not encouraged' by the tone of discussions she has heard publicly and privately about AGOA's future in Washington. But she added there was still plenty of opportunity to reposition the program for the current environment in a way that shows it helps the US as much as it helps African countries. 'It should be reframed within the transactional mindset of this administration and this geopolitical era,' she said. In 2023, US imports under AGOA topped $9.7 billion, down from $10.2 billion the previous year. The arrangement, which allows eligible African countries and businesses to export goods to the US under favorable tariff-free terms, was dominated that year by $4.2 billion in crude oil trade. It also included around $1.1 billion in apparel and over $900 million in agricultural products. The US Congress is responsible for approving the next iteration of the act, which has typically commanded bipartisan support. But there is uncertainty about its future this time around, not least because of the tone of the debates around free trade in Washington. Trump's 'America First Trade Policy' executive order on Jan. 20 has called on the US Trade Representative, the Treasury department, and the Commerce department to review all United States trade deals. Some analysts are awaiting the outcome of that review on April 1 to determine AGOA's future. 'The idea of a preferential trade deal is a difficult one in the current environment. And given the executive order, it leaves a question mark on AGOA's future,' said Frannie Léautier, who authored an Atlantic Council report in 2023 calling for AGOA's early renewal. It could boil down to making a practical case in AGOA's favor, showing that tariffs are more costly than preferential trade for US companies. 'That might help,' said Léautier. The uncertainty around AGOA is surprising because while there are differences of opinion around technical details, the trade act has always received bipartisan support in Congress and from White House administrations of either stripe. Even Heritage Foundation's Project 2025, which is broadly believed to be a rough blueprint for Trump's policy approach, offered fairly standard language about AGOA ahead of last November's election. But AGOA seems to have been caught up in the shock and awe furor around the dismantling of USAID and no one is certain anymore what might happen. 'I don't know' was the most common response I got in recent days when I spoke to Africa analysts and Congress aides. A few months earlier it was 'when' not 'if.' To be clear, while AGOA has had some wins, it has not been the kind of rip-roaring success that has driven African imports to grow exponentially every year. The $9.7 billion AGOA imports to the US last year was a miserly share of the $3.9 trillion of global US imports. And yet, even in this Trump 2.0-era of Washington upheaval, there is an optimistic take that's beginning to crystallize. This is that forcing AGOA to be seen as a transactional opportunity for the US as much as for Africa will help break the program away from its development partnership roots. If successful, the optimistic view is it could finally start to be transformative for more African countries. South Africa has been in the eye of the storm with regards to US relations in recent weeks in a range of sensitive geopolitical and domestic policy issues. AGOA came into focus as one of the levers that might be used against South Africa when four US congressmen called for its eligibility to be revoked. This is particularly significant because South Africa, the continent's most industrialized economy, is the largest beneficiary of the free trade program through which it exports cars, citrus fruits, wine, and textiles worth nearly $2 billion annually to the US. Neil Diamond, president of the South African Chamber of Commerce in the US, told Semafor: 'The biggest immediate concern is uncertainty, which discourages investment, disrupts supply chains, and forces businesses to consider alternative markets.' Far from giving up on AGOA, it is expected that US Democratic Senator Chris Coons and his Republican counterpart Senator James Risch, who chairs the Senate's foreign relations committee, will look to introduce updated legislation on the act, according to two people familiar with the plans. Last year Coons and Risch introduced the AGOA Renewal and Improvement Act in a bid to jumpstart the delayed renewal process. Why Agoa expiry should give Africa sleepless nights more than Donald Trump's tariff wars. Agoa's uncertain future: How Trump's America First policy will impact Africa.
