Tshwane Pretoria
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African countries must make the most of the opportunities available through the Africa Growth and Opportunity Act (AGOA), says Trade and Industry Minister Rob Davies.

“African countries should also ensure that there is alignment between AGOA and their development integration agendas, focus on their industrialisation and preserve policy space aimed at enhancing efforts to diversify their exports base and integrate supply chains so as to take advantage of market access opportunities under AGOA,” said Minister Davies on Tuesday.

The Minister was moderating a panel session at the Africa Trade Week in Addis Ababa, Ethiopia. The panel discussion was on AGOA and the Continental Free Trade Area (CFTA).

Tuesday’s session considered AGOA implementation over the remaining period of the legislation that grants trade preference up to 2025. The session also reflected on the future of Africa-US trade relations beyond AGOA, based on the type of trade arrangements that would support Africa’s regional integration agenda.

Minister Davies said African countries need to increase their utilisation of the trade preferences granted by the United States under AGOA to attract foreign direct investment to priority sectors that favour industrialisation.

The panel also highlighted the low levels of the use of AGOA trade preferences by eligible countries in sub-Saharan Africa largely due to supply-side constraints, productive capacity constraints and onerous rules of origin requirements.

Other reasons are a lack of capacity to meet stringent sanitary and phytosanitary measures, labelling requirements in the US, as well as the fact that some products of export interest to the African countries are not covered under AGOA.

In terms of future US-Africa trade relations, the panel stated that the US is expected to advance a trading relationship based on reciprocity.

Minister Davies noted that the US proposed a number of options for post AGOA trade relations. He said these options need to be carefully considered by African countries to ensure that their developmental priorities are not compromised.

The panel agreed that the CFTA that is currently under negotiation can be a driver of structural transformation for sustained economic growth and enhanced intra-Africa trade and investment in the continent.

Earlier in the Africa Trade Week programme — which is a new Pan-African platform for advancing intra-Africa trade dialogue — former South African Ambassador to the World Trade Organisation, Dr Faizel Ismail spoke on a coherent approach to achieving the African Union’s Agenda 2063 through the CFTA.

Ismail said the success of the CFTA and the implementation of the continent’s integration agenda would be dependent on the adoption of an inclusive approach. He said there is a need for academics and civil society to be greater involved in trade policy formulation.