South Africa talks up trade with the US – but no AGOA renewal yet
Although the future of South Africa’s AGOA (African Growth and Opportunity Act) access is still under consideration by US legislators with no firm commitments, Trade Minister Parks Tau remains optimistic that the country will retain this vital trade benefit.
“We received strong bipartisan backing from the US Congress and our colleagues in the US Administration for the reauthorisation of AGOA,” said Department of Trade, Industry and Competition (DTIC) Minister Parks Tau at a press briefing on 30 July.
The law allows duty-free access to the US market for a significant portion of South African goods, with more than R55 billion worth of exports in 2022 alone (mainly motor vehicles, fruit, and wine).
The US is South Africa’s second-largest export partner, with R61.49 billion of South African goods exported to the US in the first five months of 2024.
With AGOA expiring in 14 months, Tau and Whitfield led a delegation to the US capital in hopes of pushing for an early, at least 16-year extension of the law to provide “the required predictability and certainty to buyers, exporters, and investors.”
They said that other proposals presented at the forum included extending AGOA for stability, improving rules of origin, and enhancing Africa’s manufacturing capabilities.
While the discussions were seen as positive, South Africa’s hopes of a speedy AGOA renewal may not materialise given that the US’ focus may be elsewhere.
During the briefing on July 30, Tau highlighted that the discussions about reauthorisation were occurring while the US was nearing an important presidential election in November, suggesting that AGOA might not be at the forefront of Washington’s priorities.
“Basically, what they said is that they will try to get it through but could not give a firm commitment,” said Tau.
“We appreciate that the US is during an election and some decisions may need to be made before November … and, because it involves the legislature and the senate, they have to go through their respective processes,” he added.
US trade officials have remained tight-lipped about South Africa’s fate.
Assistant US trade representative for Africa, Connie Hamilton, said at a recent press conference that the process of consideration is still underway.
“South Africa, like all the other countries, will be evaluated based on the criteria, and then we’ll have a decision, but it’s too early now to predict what the outcome will be for any country, and not just for South Africa.”
Perceived strained relations
There have been doubts as to whether the US will extend AGOA for South Africa, with relations between the two seen to be at a knife’s edge recently.
The US House of Representatives recently passed the US-South Africa Bilateral Review Act, requiring the Biden administration to undertake a full review of South African relations with the US. However, it first needs to pass in the Senate before it can be signed into law.
The legislation – triggered by opposition to South Africa’s relations with Russia, China and Iran – saw some members of Congress calling for the country to be excluded from AGOA.
“South Africa has consistently maintained a non-aligned position, and many of the parties we engaged with said they respect a non-aligned position,” Tau said.
US lawmakers “however, perceived that South Africa might not, in certain instances, have articulated its non-alignment in a manner that is demonstrable. And it’s a matter that we’ve said we’re prepared to engage with,” added the minister.
Tau said that the initial bill that was proposed that suggested South Africa’s possible exclusion “has been amended – there’s no AGOA resolution at this stage or proposal that suggests exclusion of South Africa.”
This was echoed by Whitfield, who said that his “feeling leaving Washington, based on the run-up to this visit, is that we had a positive visit, and we left feeling very much that our relationship within AGOA is not going anywhere.”
It is reported that the recent formation of the Government of National Unity (GNU) has greatly assisted the DTIC’s lobbying efforts.
“There was a lot of interest in the GNU and its priorities, including efforts to deepen and enhance bilateral relations with the US”, said Tau.
The GNU has given South Africa what has been labeled as a “honeymoon period” for retaining its Agoa status because of a perception that it would adopt more moderate positions on trade and even foreign policy.
This has seen the current US administration throw its weight behind South Africa not only an early renewal of the legislation but also an extension for 16 years.
“We welcome the support expressed by both the Biden Administration and Members of Congress for the renewal of AGOA,” said Tau.
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