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    SA growing with AGOA, Q&A with Matthew Conroy

    The African Growth and Opportunity Act (AGOA), legislation that focusses on assisting economies of sub-Saharan Africa as well as improving economic relations between sub-Saharan Africa and the US, has recently been renewed for another ten years.

    Although it was a bumpy road, South Africa's final inclusion in this agreement will have a major impact on the South-African economy by facilitating trade and job creation as well as market access.

    Matthew Conroy, trade manager of Maersk Line Southern Africa
    Matthew Conroy, trade manager of Maersk Line Southern Africa

    According to Matthew Conroy, trade manager of Maersk Line Southern Africa, a member of Maersk Group, "the agreement will be beneficial in the long run for numerous industries." Bizcommunity had a few questions for Conroy about what impact the AGOA agreement will have on South Africa.

    What effect did the anti-dumping duties dispute have on the extension of the AGOA agreement?

    Matthew Conroy: If the lifting of the anti-dumping duties was unsuccessful, the AGOA agreement would likely not have been extended and Africa would have lost out tremendously.

    South Africa had an anti-dumping duty on chicken portions coming from the US, in place. After a meeting held in Paris between industry associations of the USA and South Africa, an agreement was reached to drop the anti-dumping duty and reopen market access, which secured South Africa's continued participation in the 2015 Africa Growth and Opportunity Act.

    Why was there such a push to have South Africa part of the AGOA agreement?

    Conroy: Should South Africa have lost the AGOA agreement, it would have been detrimental to the existing jobs and the future job opportunities in the automotive, chemical, wine and citrus industries.

    What will some of the major benefits, excluding trade security for some industries, be for South Africa upon the resigning of the AGOA agreement? What effect will the AGOA agreement with the US have on the South African economy?

    Conroy: The recent decision to renew the African Growth and Opportunity Act for another ten years will have a significantly positive impact on the South African economy. Not only will it will liberate market access to the US without any free trade agreement and maintain existing jobs, but it will spark long-term foreign direct investments which in turn will equate to additional job creation across various industries in the country.

    How will the act lead to long-term foreign direct investments and how will this stimulate job creation across automotive, chemical, wine and citrus industries?

    Conroy: When trade barriers are brought down, conducting business becomes easier and trade becomes more abundant. In the case of the AGOA agreement, there is major potential for foreign direct investment, as companies will be more willing to do business with South Africa knowing that there is a long-term agreement in place. In turn, this will help stimulate job creation across these sectors.

    South Africa's inclusion in the AGOA act has one trade barrier down. What other barriers are still up and makes it a challenge to conduct business and facilitate trade relations and investment in South Africa?

    Conroy: During Maersk's century-long presence in Africa, the Group has witnessed the economic growth first hand. The fast pace of economic growth is causing some "growing pains" on the continent, with infrastructure having to keep up with the relatively new and growing demand for consumer goods and energy. Trade efficiency depends a lot on a country's logistics capabilities and the state of infrastructure in the region. In South Africa, consistent progress is being made improving port operations - a key factor in supply chain efficiency - and this needs to continue.

    About Cari Van Wyk

    Cari Coetzee is a contributor to Bizcommunity Tourism, Agriculture and Lifestyle.
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