Strenghts and weaknesses of AGOA from a Southern African point of view and lessons to be learnt for future trade agreements

Klopper, Annette (2005-12)

Thesis (MBA)--Stellenbosch University, 2005.

Thesis

ENGLISH ABSTRACT: This study sets out to analyse the trade performance of the African Growth and Opportunity Act (AGOA) to determine the lessons that can be learnt from it strengths and weaknesses with the purpose to assist future trade negotiations - and specifically the current free trade negotiations between the United States of America (USA) and the Southern Africa Customs Union (SACU). A short overview of AGOA's content is given with specific reference to the many rules and regulations governing the arrangement. AGOA's trade performance over the past four years is analysed by country and sector to determine the main recipients of its benefits with specific attention to the performance of SACU countries. AGOA's strengths and opportunities are discussed by looking at the impact that AGOA had on investment and job creation in Southern Africa. The study takes a closer look at new markets that benefited from AGOA and how well SACU made use of the non-reciprocal nature of AGOA by looking at the trade balance with the USA. The weaknesses of AGOA are analysed by looking at its nature - the fact that it is a nonnegotiated arrangement with benefits that can be terminated at any point. The failure of AGOA to address non-tariff barriers is discussed by looking at the impact of subsidies, quotas, threat of anti-dumping actions and its restrictive rules and regulations. The unsustainability of the substantial growth that the clothing and textile industries experienced under AGOA is considered by looking at the Multi-Fibre Agreement and the impact that its termination had up to now on especially SACU countries. The analysis of AGOA's trade performance highlighted the fact that only a few countries and products benefited from AGOA. The study deliberates AGOA's failure to liberalise Southern Africa's exports. The knowledge gained by analysing AGOA, its trade performance with specifically SACU, and its strengths and weaknesses are applied by looking at the current US free trade proposal with SACU. The study looks at the motivations for the free trade agreement from both a US and SACU point of view and continues to analyse the content of the proposed agreement. The analysis includes the various problem areas within the proposed agreement as well as the potential benefits that such an agreement can bring about. The study concludes with a summary of the lessons learnt from AGOA and how they apply to the proposed US free trade agreement as well as future trade negotiations.

AFRIKAANSE OPSOMMING: Hierdie studie poog om die resultate van die "African Growth and Opportunity Act" (AGOA) oor die afgelope vier jaar te ontleed met die doel om die sterk en swakpunte van die handelsverdrag te beklemtoon as basis vir toekomstige handelsooreenkomste. Daar word spesifiek verwys na die handelsooreenkoms wat tans beding word tussen die Verenigde State van Amerika (VSA) en die "South African Customs Union" (SACU). Die studie gee 'n kort opsomming van die inhoud van AGOA met spesifieke verwysing na die verskeie reëls en regulasies wat die ooreenkoms onderskryf. Die resultate van die afgelope vier jaar word ontleed per land en sektor om vas te stel watter lande en produkte die meeste voordeel getrek het onder AGOA. Weereens word daar spesifiek na SACU se resultate verwys. AGOA se sterkpunte word bespreek deur na die impak te kyk op investering en werkskepping in Suider Afrika. Die studie kyk na nuwe marksgeleenthede wat voordeel getrek het onder AGOA. Daar word ook gekyk hoe goed SACU van die nie-wederkerige natuur van AGOA gebruik gemaak het deur te verwys na die handelsbalans tussen SACU en die VSA. Die swakpunte van AGOA word bespreek deur te kyk na AGOA se inherente kenmerke, byvoorbeeld dat die "ooreenkoms" nie onderhandel is nie en dat voordele te enige tyd opgeskort mag word. Daar word ook gekyk na AGOA se gebrek om nie-tarief gedrewe handelsstruikelblokke in die vorm van subsidies, kwotas, die bedreiging van aksies teen handelsstorting en die impak van die vele reëls en regulasies aan te spreek. Die onvolhoubaarheid van groei binne die tekstiel en kledingsbedryf (wat merkbare sukses onder AGOA bereik het) as gevolg van die terminasie van die "Multi-Fibre Agreement" word bespreek - met spesifieke verwysing na die impak op Suider Afrika. Die analise van AGOA se handelsresultate het uitgewys dat slegs 'n handjie-vol lande en produkte by AGOA baat gevind het. Die studie oorweeg die moontlike redes wat gelei het tot hierdie verskynsel. Die kennis wat opgedoen is deur na AGOA se handelsresultate te kyk, asook sy sterk- en swakpunte te ontleed, word aangewend deur na die huidige VS handelsooreenkoms met SACU the kyk. Die studie oorweeg die motiverings vir so 'n handelsooreenkoms van beide 'n VS en SACU oogpunt en maak ook 'n ontleding van die inhoud van die ooreenkoms. Die ontleding kyk nie net na die verskeie probleme wat na vore kom nie maar ook na die voordele wat SACU te beurt kan val as gevolg van die oorkoms. Die studie sluit af deur 'n opsomming te maak van die lesse wat geleer is deur die ontleding van AGOA en hoe dit van toepassing is op die huidige VS ooreenkoms asook toekomstige ooreenkomste.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/50455
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