How South Africa could fill an AGOA-sized hole

 ·21 Aug 2023

South Africa will lean harder on its partners in the BRICS group of emerging market powers should it lose preferential access to US markets, the head of the country’s largest labour federation said.

South Africa has maintained what it terms a non-aligned position toward Russia’s invasion of Ukraine, a stand that has irked Washington.

Tensions spiked earlier this year when the US ambassador to Pretoria accused South Africa of loading arms onto a Russian ship and said its actions could imperil its preferential access to American markets under the African Growth and Opportunity Act (AGOA). The government denied the allegation.

But some US lawmakers have pushed the Biden administration to review South Africa’s access to AGOA amid frustration over the country’s non-aligned position toward Russia’s invasion of Ukraine and because they deem it too developed to qualify.

South Africa will likely keep its preferential access to US markets because hundreds of American firms are also benefitting, according to the nation’s ambassador to BRICS.

“I don’t think there is any serious threat of us losing preferential access to (the African Growth and Opportunity Act). AGOA is not a one-way issue, trade is not a one-way issue,” said the nation’s ambassador to BRICS, Anil Sooklal

AGOA “is mutually beneficial, the US government is benefitting,” Congress of South African Trade Unions President Zingiswa Losi added at a Bloomberg conference on Friday (18 August). If they decide to end the preferential access, which expires in 2025, it won’t create a vacuum, she said.

“China will be coming in, India will be coming in, Russia will be coming in, and many others will be coming in because those opportunities are there,” said Losi, who was part of a delegation that recently visited the US to ask for AGOA’s extension.

South Africa has exported $2.7 billion of goods using AGOA and the so-called Generalised System of Preferences to the US, its second-largest trading partner.

BRICS leaders will hold their annual summit in Johannesburg next week. A possible expansion of the bloc will top the agenda, with Saudi Arabia and Indonesia among those who’ve expressed interest in joining.

Read: The absurd tax changes South Africa would have to make to afford the NHI

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