U.S. Upgrades South Sudan’s Preferential Trade Status

South Sudan
Flag of South Sudan

AFRICANGLOBE – The United States President Barack Obama on Thursday added South Sudan to a program that gives it further trade privileges.

The newest nation on earth, which gained its independence in July 2011, is now eligible for benefits under the African Growth and Opportunity Act (AGOA) after determining that it now satisfies the eligibility criteria.

Under U.S. law the president has the power to determine which countries in Africa can join the program after performing an annual evaluation process.

According to the U.S. Trade Representative website, AGOA was established in 2000 to provide eligible African countries to export a wide variety of products to U.S. markets duty free including apparel, footwear, and some agricultural and processed food products.

Last March Obama designated South Sudan as a beneficiary developing country under the Generalized System of Preferences (GSP) which allows preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories.

AGOA designation now gives South Sudan an opportunity to export more products than is available under GSP. It also allows access to US credit and expertise.

“In the face of many challenges, South Sudan has made measurable progress since becoming an independent nation in July 2011,” U.S. Trade Representative Ron Kirk said in a statement.

“President Obama’s designation of South Sudan as an AGOA-eligible country will help support its continued economic growth through increased trade and investment – which is a proven tool for sustained development” he added.

The U.S. National Security Council spokesman Tommy Vietor said that making South Sudan eligible “could help support this new nation’s development”.

African countries are designated by the U.S. under AGOA “if they are determined to have established, or are making continual progress toward establishing the following: market-based economies; the rule of law and political pluralism; elimination of barriers to U.S. trade and investment; protection of intellectual property; efforts to combat corruption; policies to reduce poverty, increasing availability of health care and educational opportunities; protection of human rights and worker rights; and elimination of certain child labor practices”.

South Sudan is currently under economic duress following its decision to shut down its entire 350,000 barrel oil production which it exported though Sudan’s pipelines. The two countries disagreed over the fee Juba should pay for the service.

A deal signed last September between the two sides that would allow a restart of oil flow is now on hold over other security issues which Sudan insists must be finalized first.

Emerging from more than two decades of war, which killed roughly two million and displaced million others, South Sudan is struggling to build government institutions, combat corruption.