SA and US Trade Performance under AGOA in the Sectors of Apparel Automotive and Iron and Steel, 2012-2016

By Marcus Hollington

Research Associate, FAPISA

31 Oct. 2018

This study seeks to assess the impact that the Africa Growth Opportunity Act (AGOA) – a preferential trade agreement designed to facilitate trade and investor relations between eligible Sub-Saharan Africa countries and the United States (US) – has on beneficiary countries. This is done by using South Africa (SA), a country which in many respects is an outlier on the African continent from an economic perspective, but which nonetheless maintains many socio-economic similarities to other developing countries on the continent such as poverty and unemployment, and significant inequality as a case study. The primary research question explored by the study is whether SA benefits from its trade relationship with the United States (US) under AGOA within sectors of apparel, automotive and iron and steel and if so, the study asks if the quantitative impact in terms of SA exports to the US is tangible.

Conversely, the primary research question concurrently answers the sub-question of the study which is whether AGOA benefits the US more than SA and if so, to what degree? This will help the study gauge the extent of the loss (if any) that SA accumulates in its trade  relationship with the US. Additionally, given that AGOA also seeks to facilitate investor relations between itself and SSA, the study assesses the extent to which the trade agreement has facilitated foreign direct investment (FDI) flows and multi-national enterprise (MNE) employment between the two countries and whether the benefits within the aforementioned are tangible. The time period of analysis is from 2012 to 2016.

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