The implemention by the USA of the African
Growth & Opportunity Act (AGOA) in 2001 has led in 2002 to a number of
initiatives that are already growing South African automotive exports to North
America.
Combining the export incentives under the
MIDP with duty free access into the United States market promises to stimulate
additional manufacturing operations in South Africa. Local commercial vehicle
manufacturers have a particular incentive with the 25 % duty reduction for US
imports of various types of goods vehicles.
Under the Act, the US is assisting the
development of sub Saharan African states by extending duty free and quota free
access into the US market for a broad range of approved products until
2008. South Africa and some 33 other African countries are eligible for
these benefits, with their automotive component and motor vehicle exports
qualifying for duty free and quota free access into the US subject to
compliance with rules of origin restrictions and customs and excise
formalities.
BMW South Africa has been one of the
first to exploit the AGOA concessions successfully, its 3-Series car exports
indicating the potential for other South African automotive products which can
achieve the required minimum local content level of 35% of the FOB import value
of the product into the United States (i.e. the imported content of the product
cannot exceed 65%). If a South African OEM/supplier uses American
materials or components in South African manufacturing operations, a maximum of
15% of such US inputs of the FOB customs value will qualify as South African
content.
The list of components eligible includes:
- Fittings for furniture, coachwork or the like
- V-belts of plastics containing textile fibres
- Belts and belting (except V-belts) of plastics
- Transmission V-belts of vulcanized rubber, etc.
- Transmission V-belts of vulcanized rubber, etc.
- Endless synchronous transmission belts of vulcanized rubber, etc.
- Transmission belts of vulcanized rubber of trapezoidal cross section,
combined with textile materials
- Belting of vulcanized rubber
- Iron or steel leaf springs and leaves therefor suitable for motor
vehicles suspension other than those with a GVW over 4 metric tons
- Base metal (other than iron/steel/aluminium/zinc) mountings, fittings
and similar articles suitable for motor vehicles and base metal parts
thereof
- Ball bearings other than those with integral shafts
- Tapered roller bearings including cone and tapered roller
assemblies
- Housed bearings (including ball or roller bearings)
- Bearing housings nesoi: plain shaft bearings
- Parts of bearing housings: and plain shaft bearings
The goods imported into the US must represent the
growth, product or manufacture of designated beneficiary sub Saharan African
countries.
| a. |
The cost or value of the materials
produced in one or more designated beneficiary sub Saharan African countries,
plus |
| |
|
| b. |
The direct costs of processing operations
performed in the designated beneficiary sub Saharan African country or any two
or more designated beneficiary sub Saharan African countries that are members
of the same association of countries is not less than 35% of the
“appraised” value of such article at the time it is entered for home
consumption in the United States. |
South African exports into the United States are
required to comply with US rules of origin requirements and specifically the
local content of South African products exported to the United States must
represent at least 35% of the FOB import value of the product into the United
States (i.e. the imported content of the product cannot exceed
65%). If a South African OEM/supplier uses American materials or
components in South African manufacturing operations, up to a maximum of 15% of
such US inputs of the FOB customs value will qualify as South African
content.”
