AGOA Status Top of Mind for WC Farmers

Today Premier Alan Winde met with representatives from across the Western Cape’s agriculture sector and value chain as well as associated industries in Stellenbosch. The intention of the meeting was to hear firsthand from them what the most pressing challenges are that they face. Chief among the issues addressed were the risk of South Africa losing its membership to the African Growth and Opportunity Act (AGOA). “This was an opportunity for our industry partners to be honest with us and for us as the Western Cape Government (WCG) to also be frank: our access to preferential markets in the United States of America (USA) is under threat. The snowball effect of this would be considerable, heightened by a volatile global economic climate. I wanted to hear from our partners in agriculture what we should be doing to protect this vital industry that creates several thousand jobs in the Western Cape.”

The economic relationship between the United States and Western Cape is robust and growing and we want to further expand:

• Over the past 20 years trade has grown steadily by 335%;
• In 2021 the US was the province’s largest export market;
• Between January 2013 and December 2022, a total of 68 Foreign Direct Investment (FDI) projects were recorded from the USA to the Western Cape, more than 82% of which were new investment;
• These projects generated a total capital investment of more than R30 billion, creating 4343 jobs.

Agriculture is of particular importance being a vital economic lever in the Western Cape. The province’s agriculture sector is responsible for over 50% of the national total primary agricultural products exported to the USA. Furthermore, the province exported R2,53 billion of products such as food, beverages, and tobacco to the USA, bringing the total value of primary agriculture and agri-processed products exported to the USA to R5,07 billion. This amounts to 33% of the total value of primary and secondary agriculture of the Western Cape’s exports to the USA.

Among the issues raised by representatives at today’s gathering were:

• The Western Cape stands to lose the most, in comparison to the rest of the country – the increase in trade costs would be 10 times higher than what the Western Cape is currently paying.
• The Western Cape and South Africa would become a less competitive global market.
• The Western Cape and South Africa need to position themselves to become more of a reciprocal trade partner.
• The Western Cape and South Africa must prove that they are trustworthy trade partners.
• Underscoring all these issues is the impact on job creation and economic growth.

The Premier will lead a Western Cape Government delegation on an official trip to the (USA) this month. Top of the agenda is securing and further solidifying vital relations, and expanding them, specifically in the areas of agriculture, energy, trade, and tourism, among others.

Addressing the gathering, Premier Winde noted, “We are going into a difficult situation. This trip is as important as ever, in large part because we are going to the USA to convince our trade partners that while the rest of our country seems to be at the mercy of irrational and dangerous foreign policies, we as the Western Cape are doing things differently and value the USA as an important strategic partner. Our province has for years enjoyed a strong and fertile investment relationship with the USA and in the interests of our residents we believe we must build on and maintain these ties. We are going to the USA not just as a region, but as a country to reassure stakeholders and deepen our relationship.” At the forefront of this trip are the Western Cape’s residents. “We are fighting for our economy, jobs and our residents,” he stressed.

The Premier remarked, “We must keep this momentum moving in the right direction. We have seen encouraging employment figures over the past several months in our province. But the poor economic climate our country finds itself in is holding back our full job creation potential. We are going to the USA to tell our partners: ‘Your investments are safe in the Western Cape’. But the priority extends beyond agriculture; numerous facets of our economy are also benefiting from AGOA.”

Provincial Minister of Finance and Economic Opportunities Mireille Wenger will be part of the delegation. The Western Cape and Cape Town’s official tourism, trade, investment and film promotion agency Wesgro will be represented on the trip by Chief Executive Officer Wrenelle Stander.