South Africa’s diplomatic rift with the US — which some experts fear could get the country kicked out of a trade pact allowing duty-free access to US markets for certain goods — puts an estimated 20,000 to 35,000 export-linked jobs at risk in the local citrus market.
Citrus Growers Association (CGA) CEO Boitshoko Ntshabele told Business Times that 9% of South Africa’s citrus is exported to North America as a whole.
“South Africa is the world’s second-largest exporter of citrus, and its future depends on diverse markets. Our exports to the US have almost doubled since 2017. There is massive further potential in the market. The US consumer has shown a taste especially for our oranges and mandarins.”
The CGA represents about 1,400 growers throughout Southern Africa. Besides South Africa, they include Botswana, Eswatini, Mozambique, Namibia and Zimbabwe.
Trade experts have expressed concern that the administration of US President Donald Trump may consider terminating the African Growth and Opportunity Act (Agoa) or ending South Africa’s participation in it.
Enacted in 2000 by former President Bill Clinton, the trade programme offers eligible sub-Saharan African countries duty-free access to the US market for more than 1,800 products, including citrus produce, wine, nuts, and vehicles. Agoa is an Act of Congress and expires this year. Some Republican hardliners in Congress have pushed for South Africa’s exclusion from the pact.
Huge impact
Ntshabele said the impact of trade barriers on the export of South Africa’s citrus would be felt in communities where farming of the fruit is essential the livelihoods of many households.
The impact will be especially felt in rural communities like Citrusdal. The Olifants River Valley is sustained by US exports of citrus. The CGA has calculated that 35,000 South African jobs are connected to US citrus exports. If South Africa is out of Agoa and tariffs make our fruit more expensive many rural communities will feel it, most likely in significant job losses
— Boitshoko Ntshabele, Citrus Growers Association CEO
“The impact will be especially felt in rural communities like Citrusdal. The Olifants River Valley is sustained by US exports of citrus. The CGA has calculated that 35,000 South African jobs are connected to US citrus exports. If South Africa is out of Agoa and tariffs make our fruit more expensive many rural communities will feel it, most likely in significant job losses.”
Because citrus is a seasonal product, US consumers get to enjoy South African produce when it is summer over there, which is normally citrus harvesting season in South Africa.
Search for markets
“Our exports do not threaten US citrus growers. Quite the opposite. But keeping customers supplied and loyal to the category ... every year we ‘hand over’ citrus consumers to the local citrus growers in the US. We sustain the availability of high-quality and affordable citrus varieties to the US consumer.”
He said South Africa exports citrus to 120 countries worldwide, and in most markets there is a good balance between supply and demand.
“The current situation is complicated by the fact that citrus production will increase immensely in the next few years because of increased plantings. We thus need every market we can get. Retaining and expanding markets will then create thousands of new jobs.”
Speaking at the South African Reserve Bank’s biennial conference in Cape Town this week, Swati Dhingra, an external member of the Bank of England’s monetary policy committee and associate professor of economics at the London School of Economics, said the US’s protectionist policies ran a remote risk of spreading to larger trade partners globally.
“The danger here is — and I think that’s a fairly extreme situation and I don’t think it’s a central scenario — would be where you start to have many of the larger trade partners also go and start doing the same sorts of... policies with basically a very limited set of suppliers because they want to exclude certain countries and trade markets.
“If that happens, you can’t adjust to that quickly enough. So then, I think that’s the seriousness that holds inflationary pressure. It’s not at a very broad base, but it would at least bring very concentrated price spikes. But I think we’re not quite at that point.”
Ominous signs
Future Forex CEO Harry Scherzer said the potential cancellation of Agoa could disrupt South Africa’s trade, strain relations and reshape the international money transfer landscape, making agile foreign exchange strategies more crucial than ever.
“Market privileges under Agoa remain in place until the end of September 2025 unless it is extended, replaced, or cancelled. However, recent signals from Trump have cast doubt on whether an extension will materialise or if stricter new terms will be imposed instead.
“The signs are not good. Last week, Trump issued an executive order freezing aid to South Africa in response to its land reform law, while four leading US congressmen wrote to [him] and demanded he revoke South Africa’s Agoa benefits, accusing it of undermining US security and foreign policy interests.”
Scherzer said agriculture was at risk as South Africa exported large quantities of citrus, wine, and macadamia nuts to the US under Agoa. Without duty-free access, the prices of these products would rise for Americans, leading to declining sales or buyers sourcing produce elsewhere.
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