This week’s scheduled expiry of the African Growth and Opportunity Act (Agoa) will again spotlight the state of trade relations between South Africa and the US.
There is deep concern about the impact of Agoa’s termination on the South African economy, especially its export sectors, including substantial job losses. The situation is likely to be compounded by stuttering negotiations aimed at mediating US president Donald Trump’s reciprocal tariffs against South Africa and many other countries. In our case the tariffs reach 30%.
Established in 2000, Agoa provides duty-free access to the US market for select products from qualifying sub-Saharan African countries. In theory, it aims to promote economic growth and strengthen relations between the US and African countries.
South Africa is among the African states that have benefited significantly from Agoa, especially in the agricultural and automotive sectors. And the US is among our largest trading partners.
That is why, while he was attending the UN General Assembly this week, President Cyril Ramaphosa advocated for Agoa’s renewal. Addressing business leaders during the South Africa-US trade and investment dialogue, Ramaphosa said Agoa’s expiry would not only erase the benefits of the deal, but would “also remove the link to the generalised system of preferences which has been so critical to many of our exporters”.
He added: “For this reason, I appeal for your support in advocating for its renewal.”
Ramaphosa emphasised that Pretoria wanted to deal with matters between the two countries in a constructive way. But, as South Africa discovered during trade negotiations with the US, such engagements will not be an easy affair in an atmosphere where, as Ramaphosa noted, trade is increasingly used as political and diplomatic leverage.
As Agoa reaches the end of its current term, it is hoped the US will decide to renew it — not only for South Africa but also for the other benefiting countries.
Beyond this week, it will be essential for talks to continue between South Africa and the US — on trade and at a diplomatic level — to better manage Pretoria-Washington relations.
While South Africa stands for a more multilateral global dispensation … the US’s demand is that other countries fall in line with its own preferences
That said, our relations look set to continue to be bedevilled by two things.
First, there is the character and personality of Trump, who has proved himself to be a capricious leader who often does not mind basing decisions on false information. We saw this when he peddled the lie of a white genocide in South Africa.
Second, our often-divergent views on key global issues guarantee that our dealings with the US will continue to be difficult. For one thing, while South Africa stands for a more multilateral global dispensation — where the views of all countries matter, irrespective of their political, military or economic power — the US’s demand is that other countries fall in line with its own preferences.
For instance, whereas South Africa has taken a stance, on principle, to support the struggle of Palestinians to be free, including laying genocide charges against Israel at the International Court of Justice, the US has remained Israel’s economic, military and diplomatic supporter.
Even on climate change, a concern throughout the world, we find ourselves on opposite sides of the issue. Only this week, Trump described climate change as “the greatest con job ever perpetrated on the world” and derided the use of renewable energy.
The reality is that irrespective of our differences with the US, we have to continue engaging with it, without sacrificing our principles as a country, which are enshrined in our constitution. After all, jaw-jaw is better than war-war, as is often said.
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