South African Officials Advocate for Renewal of US Trade Agreement
The new trade minister of Pretoria is optimistic about the renewal of the country’s membership in AGOA, but concerns about ties with China, Iran, and Russia may hinder the process.
JOHANNESBURG—The South African government is actively lobbying the administration of President Joe Biden to extend Washington’s main preferential trade program with Africa before the upcoming U.S. election in November. There are fears that if former President Donald Trump wins the White House, he may choose to cancel the agreement.
The African Growth and Opportunity Act (AGOA), first implemented in 2000, grants tariff-free access to U.S. markets for a variety of products to 32 African countries, resulting in billions of dollars in earnings. South Africa has been the primary beneficiary of AGOA since its inception 24 years ago, enabling exports of motor vehicles, fresh produce, and other goods worth tens of billions of dollars to the U.S.
President Cyril Ramaphosa’s office stated that over the last decade, South Africa has consistently earned between $2 billion and $3 billion annually from AGOA. The program, renewed twice previously in 2008 and 2015, is currently set to expire in September 2025.
African countries must meet various conditions to qualify for AGOA benefits, including adherence to democratic principles, respect for human rights, and alignment with U.S. interests.
Challenges to Membership
A bipartisan group of over 200 lawmakers in Washington has raised concerns that South Africa is not meeting AGOA standards due to its support of “regimes hostile to the United States,” such as China, Iran, and Russia. They are pushing for South Africa’s expulsion from AGOA.
Recently, the Biden administration announced the removal of four nations from AGOA in 2025, including Central African Republic, Gabon, Niger, and Uganda, citing reasons such as human rights violations and political repression.
U.S. Rep. John James (R-Mich.) expressed worries that South Africa could face a similar fate due to its close ties with China, Iran, and Russia, which he believes contradict South Africa’s historical policy of non-alignment and pose risks to the U.S.’s interests. James chairs the subcommittee on Africa of the House Foreign Affairs Committee.
It was noted that South Africa’s largest economic partner on the African continent is the U.S., with trade amounting to $21 billion in 2021. The country’s close ties with China, Iran, and Russia have raised concerns among U.S. lawmakers, with speculations about the future of AGOA benefits.
Trade Minister’s Confidence
South Africa’s trade minister, Parks Tau of the ANC, remains hopeful about the country’s inclusion in AGOA upon its renewal in 2025. Despite positive interactions with U.S. trade representatives, big businesses, and lawmakers in Washington, local economists and analysts are cautious about the outcome.
David Ansara, CEO of South Africa’s Free Market Foundation, believes the renewal of AGOA is contingent on the results of the upcoming U.S. election. He anticipates different scenarios based on the election outcome, highlighting the importance of geopolitical considerations and trade dynamics in the decision-making process.
Overall, South Africa’s membership in AGOA and its future trade relations with the U.S. are subject to various political and economic factors, highlighting the complexities of international trade and diplomatic relationships.
