Trade, Industry, and Competition Minister Parks Tau commended the United States for its recent announcement affirming that South Africa will maintain its trade privileges under the African Growth and Opportunities Act (Agoa) for another year. He remarked on Monday that this decision “establishes a strong basis for improving SA-US relations.”
The Biden administration shared this news over the weekend, just prior to President-elect Donald Trump’s inauguration in January. As a result, South Africa has secured its role in the program for at least one more year; nonetheless, the South African government plans to advocate for Trump during next year’s review and in the approach to the G20 Summit in Johannesburg.
ADVERTISEMENT
CONTINUE READING BELOW
Read: SA avoids US censure while strengthening ties with rivals
Under Agoa, South Africa along with 31 other sub-Saharan African nations, enjoys duty-free access to the US market.
In a statement published on Saturday, December 21, US Trade Representative Sam Michel confirmed that the list of eligible countries for Agoa remains unchanged, as does the list of ineligible countries.
“After the annual Agoa eligibility review, which included a public hearing in July chaired by the Office of the United States Trade Representative, President Biden has chosen to continue Agoa benefits for all currently eligible countries,” Michel stated.
“South Africa is eager to work together with the US on initiatives that yield benefits for both nations,” Tau added.
Furthermore, the minister expressed contentment that the National Defense Authorization Act, which the US Congress has forwarded to Biden for his approval, does not contain clauses related to reviewing SA-US relations.
Read: Ramaphosa appeals to Musk, promotes trade with the US
Earlier in June, the US House of Representatives passed legislation requiring the Biden administration to undertake a comprehensive review of America’s relationship with South Africa.
This decision was influenced by South Africa’s connections with Russia, China, and Iran, assessing whether these relationships undermine US national security.
Lobbying by SA
Since the formation of the government of national unity, the new administration has been proactive in repairing its relations with the United States.
In September, Minister of International Relations and Cooperation Ronald Lamola visited Washington DC, characterizing it as a “successful working visit.”
Two months before Lamola’s visit, Tau and his deputy Andrew Whitfield participated in the 21st Agoa Summit in the US from July 24 to 26.
Read: GNU is planning a US mission to lobby against reviewing ties
In a press briefing after the Agoa summit, Tau expressed hopes that South Africa’s benefits would be renewed before the US elections in November 2024, indicating that the “least desirable” scenario would be having a decision on Agoa delayed until 2025.
Trade dynamics under Trump
The possibility of Trump returning to the presidency in November raises concerns over potential global trade conflicts should he decide to follow through on his promise of tariff hikes.
ADVERTISEMENT:
CONTINUE READING BELOW
South Africa may face scrutiny, not just for its position on Israel and its connections with Russia, but also for its membership in the Brics group.
Read/listen:
Trump threatens ‘100% tariffs’ if Brics nations do not ‘commit’ to the dollar
US supports early extension of Africa trade pact, envoy states
Impact of Trump’s win on South Africa
SA maneuvers wisely by maintaining neutrality – Tshabalala
In early December, Trump warned on his social media platform, Truth Social, that Brics nations risk facing “100% tariffs” if they create a new currency to replace the dollar.
“We demand assurances from these nations that they will not establish a new Brics currency nor endorse any other currency to supplant the formidable US dollar, or they will face 100% tariffs and lose access to the great US market,” Trump asserted.
Trade statistics between US and SA
South Africa’s exports to the United States have seen substantial growth over the past five years, increasing from US$1.9 billion (approximately R35.2 billion) in 2019 to $3.3 billion (R61.12 billion) in 2023 under Agoa, along with the Generalized System of Preferences (GSP) initiative.
In 2023, 25% of South Africa’s total exports to the US were carried out under Agoa and GSP, with Agoa representing 21% of that total, as highlighted by Tau.
Significant exports from South Africa under Agoa include automotive parts, ferro-alloys, citrus fruits, jewelry, nuts, chemicals, wines, and vessels.
Read:
Trump’s growth concerns contribute to uncertainty in SA policies
Donald Trump will prioritize America
According to Tau, Agoa, initiated under President Bill Clinton in 2000 and extended twice, is set to conclude at the end of September 2025.
There are anticipations for its renewal by the US government.
“South Africa, in accordance with continental initiatives, has urged Congress to consider extending Agoa for at least 16 years while retaining all nations in the program to support and develop regional value chains,” Tau stated.
“Maintaining all beneficiary countries will ensure that Agoa continues to facilitate the African Continental Free Trade Agreement and promotes the continent’s regional integration efforts.”
Follow Moneyweb for extensive finance and business news updates on WhatsApp here.
