TARIFF-free car exports from South Africa to the US were likely to continue unimpeded under the African Growth and Opportunity Act (Agoa), according to an official from the office of the US trade representative.
Due to the volume of cars and components exported from South Africa to the US, South Africa’s continuation within Agoa is vital to certain elements in the local industry.
Agoa permits tariff-free access from eligible African countries into the US market for a large number of products. There are constant concerns that South Africa’s eligibility may be adjusted in future extensions of Agoa due to the size and diversity of its economy in relation to the rest of the countries falling under the scheme.
An official from the office of the US trade representative said: "Our team has looked into this and have no reason to believe there are US auto industry concerns related to South African autos being imported under Agoa.
"We haven’t heard of any lobby to exclude South African car imports to the USA from extensions of Agoa or otherwise."
Fears about South Africa’s continued participation in Agoa were raised last year ahead of a visit to South Africa by US Secretary of State Hillary Clinton. Both Trade and Industry Minister Rob Davies and Department of Trade and Industry director-general Lionel October expressed concern that, according to Mr October in August last year, "they think we’re too developed".
A further concern, according to Prof Peter Draper of the South African Institute of International Affairs, was South Africa’s foreign policy outlook. He said the view that South Africa was "anti-US and pro-China" was "gaining currency".
Short-term fears about the future of Agoa and South Africa’s participation in it were dispelled, however, when the US Congress voted to renew the agreement until September 2015 longer-term, concerns lingered.
However, two congressional staffers said the agreement was likely to be renewed once it expires in 2015, but that the terms under which this will be done would not be decided until closer to the time.
BMW South Africa spokesman Guy Kilfoil described the comments as "great news".
"It makes sense, given the relatively low volume of imports compared with the size of the US market," Mr Kilfoil said.
BMW exports its 3-Series model to the US.
"We’ve always run our business with Agoa in mind, and we’re glad it’s going to continue," Mr Kilfoil said.