PRETORIA-- South Africa signing the African Continental Free Trade Area (AfCFTA) agreement this week is a significant development, says Trade and Industry Minister Rob Davies.
It's a very significant and strategic development, said the Minister after Wednesday's meeting of industry ministers of BRICS countries -- Vrazil, Russia, India, China and South Africa -- at the resort town of Magaliesburg, about 80 kilometres west of here.
Signing the AfCFTA agreement will pave the way for South Africa to benefit from intra-regional trade within the continent. It is envisaged that the agreement will contribute to the growth and diversification of the South African economy and therefore create jobs, as well as reduce inequality and unemployment.
President Cyril Ramaphosa signed the agreement during the African Union (AU) Summit held on Sunday and Monday in Nouakchott, Mauritania. South Africa was one of the holdouts when 44 of the AU 55 member States signed the agreement at a special AU meeting in Kigali, Rwanda, on March 21 this year.
The significance of the AfCFTA is that it is intended to boost intra-regional trade which is at very low levels of about 12 per cent of total trade ..... that's very small compared with other regions. Behind that lies a vision of many of us that it is by creating a large market and emulating what China is doing now, turning to its domestic market, when trade conditions become tight.
This, said Davies, can create a large market that will allow the emergence of reaching value chains and will assist us all to move up the value chain from producing primary commodities into industrial products.
Meanwhile, the Minister is set to attend the Africa Growth and Opportunity Act (AGOA), Forum in Washington DC next week.
In March 2016, Pretoria announced that it had concluded negotiations on its poultry, beef and pork trade with the United States, a move that brought to a close months of discussions with Washington on the terms required for South Africa to secure its position in AGOA, a US trade legislation granting preferential access to the US market for qualified sub-Saharan countreis.
In November 2015, then US President Barack Obama announced that the duty-free entry into the US of South Africa's agricultural exports under AGOA would end if South Africa's health restrictions on the import of US poultry, beef and pork were not lifted by Jan 4. However, the deadline was extended to 15 March 2016.
At Tuesday's briefing, Davies said the AGOA is not a negotiated agreement. It's a series of concessions offered to countries, an act of [the US] Congress. There will be a lot of discussions. AGOA underpins a relatively balanced trading agreement between us [and the US] and we are saying if it isn't broke it needs no fixing so that's our message.
AGOA was extended in June 2015 for 10 years until 2025, with South Africa's inclusion.
Source: NAM NEWS NETWORK