The Forum on the USA’s African Growth and Opportunities Act (AGOA), Johannesburg 2-4 November

Under the AGOA agreement, the USA should engage with its African partners by means of regular summits. Therefore, on 2-4 November a meeting was convened in Johannesburg between the African nations and the USA, with a conference and exhibition. EFA/EFSA moderated a session on “Meeting US market entry requirements and export promotion and distribution systems to the US” which turn out to be a tour de force of the do’s and don’ts of online selling to the USA. The session was put on jointly by the SA DTIC and USAid. There are now discussions on whether an online book could result. We will keep you informed. Another proposal was that an opportunity should be found for a matchmaking between US and African SMEs. This might be held at the planned AU conference in April next in Lusaka, Zambia.

AGOA, which was agreed in 2000 and revised in 2015, offers tariff-free entry into the USA for over 1,800 products to 36 sub-Saharan countries. It does not include services, and there are several goods particularly agricultural/foodstuffs that are not covered. The meeting, attended by trade ministers from 35 countries, discussed, among other issues, whether new goods could be added, how digital products might be included, how to incorporate trades unions, how to promote SMEs, women-owned companies; the encouragement of FDI investment from the USA; and the use of AGOA to encourage ethical behavior and democracy. At the summit, the USA announced that it was expelling 4 African countries (Niger, CAR, and Gabon until they reinstated democracy, and Uganda for its new anti-gay law). SA has volunteered to mediate. An important point which came up was the inclusion of processed agricultural produce. Counties such as Ghana pointed out that they wanted to process much more of their cocoa and coffee crops, instead of sending the raw beans for processing in the USA.

The USA pointed out that in return for such a generous trade deal, they wanted to see more acceptance of US companies, particularly SMEs, in Africa, in the tech space.

At the Africa/US summit earlier in the year (see previous Newsletters), African leaders had called for the AGOA negotiations to be brought forward a year, to 2024, instead of completing the agreement in 2025 as scheduled in the Act The reason being that the US elections will be held next year, and there is a possibility that Mr Trump could be reelected. Trump is known to be against special trade agreements. However, the US administration at the Summit made it clear that the agreement will go its term and not be rushed through.

After the EFA session, the participants called for the following:

• An online guide by experts should be prepared to assist e-merchants sell into the USA. This should include how to prepare (research your market); unique requirements for products destined for the US (barcodes, labelling of ingredients, etc), the options available for selling (e-platforms and marketplaces, own e-shop, etc); logistics options (including combining with other sellers); leveraging export promotions; arriving in the USA (taxes, FTA fees, warehousing); your potential customers – how to cut through the clutter: influencers, using SEO, etc.
• A list of available export promotions to help SMEs should be made available by the DTIC.
• The USA should stimulate investments in ecommerce, especially for SMEs and niche markets.
• The USA should encourage combining exporters (for logistics/warehousing).
• AGOA should demand e-documentation, pre-clearance and smart contracts – making digital trade really digital.
• All parties should ensure free flow for data transfers.
• The USA should retain its de minimis rule for goods under the value of $800.
• All parties should promoting data collection specifically for products sold online. Better data will stimulate more investment and also assist governments to assess the importance of ecommerce as a driver for trade.