SA exporters are reaping the rewards of US trade incentive

Robert Laing

Robert Laing

The United States looks set to overtake Japan as South Africa's biggest customer this year.

Department of Trade and Industry data shows South Africa exported R34 billion worth of goods to the US during this year to August, placing America slightly ahead of the R33,8 billion exported to Japan.

Craig Allen, the US Commercial Service's senior commercial officer in Johannesburg, said this was thanks to the African Growth and Opportunity Act (Agoa), a US government incentive which allowed 99,6 percent of exports from this country to gain exemption from US import duties.

"The US at $14 trillion is by far the largest market in the world. South African companies were initially a bit slow to take advantage of Agoa, but they are learning you just have to tick the right box to get your goods into the US duty-free."

US government data shows exports from South Africa are 22 percent higher this year to September than the same period last year. South African exports to the US grew 27,4 percent in 2006, Allen said.

Japan has traditionally been South Africa's largest trading partner. Platinum group metals, which at R65 billion in 2006 are South Africa's biggest export revenue generator, are bought by car makers for autocatalysts. Japan is also a big customer of South African coal, this country's second biggest product at R38 billion.

South Africa is moving up the value chain and reducing its dependence on raw material sales, but not fast enough to balance our trade, the DTI's data shows.

India's drive to specialise in generic medicines and other high tech products has seen its imports to South Africa rocket 251 percent over the past four years. China, over the same period, has advanced from our fifth to second biggest source of imports despite clampdowns on its cheap clothes to protect local manufacturers.