US senators push updated AGOA bill with implications for SA boatbuilding

A bipartisan group of US senators are proposing an amended version of the African Growth and Opportunity Act (AGOA) that could have implications for South Africa’s boatbuilding industry.

The amendments are contained in a bill to be presented to the US Congress, according to a Reuters news report last week. The bill seeks to promote trade relations between the US and African countries by allowing duty-free access to the US market for a wide range of African products, among them boats. The South African Boat Builders Export Council (SABBEX) recognises the trade deal as an important aspect of the country’s boatbuilding value proposition.

The latest version of the AGOA bill – which first surfaced in draft form in November last year – omits a call for an immediate review of South Africa’s eligibility as an AGOA beneficiary. This call had been part of the draft bill and emanated from concern over South Africa’s perceived close international relations with countries with questionable human rights records, notably Russia.

However, an aide to one of the senators introducing the bill told Reuters there was still concern about South Africa’s international relations. The aide said singling out South Africa “was viewed as unnecessary…as the bill already allows for out-of-cycle reviews,” Reuters reported.

In terms of the new bill a country’s eligibility would be reviewed every two years instead of annually, and the trade pact would remain in place until 2041. “If countries were found to be ineligible for the programme, the president would have a menu of options for enforcement, ranging from full termination of benefits to taking no action,” Reuters reported. “Current statute requires the president to terminate Agoa benefits if a country does not meet eligibility.”

South African political and business stakeholders have urged US lawmakers to retain South Africa’s Agoa eligibility which they say is in the best interests of sub-Saharan economic development. Last year South African President Cyril Ramaphosa said the trade deal was “an incentive for investors to build new factories on the African continent”.

The local boatbuilding sector has attracted significant foreign investment over the past decade, notably the recent purchase of South Africa’s biggest yard, Robertson & Caine, by European investment firm the PPF Group.

South Africa is by far the biggest beneficiary of AGOA, to the tune of exports valued at $3.6bn (£2.9bn) last year, according to info supplied by US secretary of trade Katherine Tai. The South African Boat Builders Export Council is among many local stakeholders hoping for speedy renewal of the important trade benefit.