Agoa Loss Would Deal Big Blow To South Africa's Vehicle And Component Manufacturing Industries

The diplomatic spat between the United States and South Africa means South Africa stands a very real chance of losing its duty-free access to the US market through the African Growth and Opportunity Act AGOA.

This would not only have a highly detrimental effect on the local vehicle manufacturing industry, but also on the countrys tyre, equipment and parts sector, industry bodies warn.

Dylan Petzer, Vice-Chairperson of the South African Tyre, Equipment and Parts Association TEPA, warns about a potential domino effect of reduced exports.

Our concern is that if exports drop, so does demand for locally produced rubber, manufacturing equipment, and logistics services. This will naturally result in factory downsizing, job losses and wasted investments in meeting US safety and environmental standards, Petzer said.

Add to this a substantial loss of tax revenue to the fiscus, and we have a recipe for a potential societal disaster.