Trade, Industry, and Competition Minister Parks Tau commended the recent announcement by the United States that South Africa will maintain its trade advantages under the African Growth and Opportunities Act (Agoa) for one more year. He remarked on Monday that this decision “lays a strong foundation for improving SA-US relations.”

This announcement from the Biden administration came over the weekend, just prior to President-elect Donald Trump’s inauguration in January. As a result, South Africa has confirmed its participation in the program for at least another year; however, the South African government plans to advocate to Trump during next year’s review and in preparation for the G20 Summit in Johannesburg.

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Through Agoa, South Africa and 31 other sub-Saharan African nations benefit from duty-free access to the US market.

In a statement issued on Saturday, December 21, US Trade Representative Sam Michel confirmed that the list of countries eligible for Agoa remains unchanged, as does the list of those that are ineligible.

“After the annual Agoa eligibility review, which included a public hearing in July chaired by the Office of the United States Trade Representative, President Biden has decided to continue Agoa benefits for each currently eligible country,” Michel stated.

“South Africa looks forward to partnering with the US in ways that benefit both nations,” Tau added.

Additionally, the minister expressed his relief that the National Defense Authorization Act, which was sent to Biden for his signature by the US Congress, does not include provisions regarding the review of SA-US relations.

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In June, the US House of Representatives passed legislation requiring the Biden administration to conduct a comprehensive review of its relationship with South Africa.

This decision was triggered by South Africa’s connections with Russia, China, and Iran, and involved an assessment of whether these relationships jeopardized US national security.

Lobbying by SA

Since forming the government of national unity, the new administration has actively pursued the improvement of relations with the United States.

In September, Minister of International Relations and Cooperation Ronald Lamola visited Washington DC, characterizing it as a “successful working visit.”

Two months prior to Lamola’s trip, Tau and his deputy Andrew Whitfield participated in the 21st Agoa Summit in the US from July 24 to 26.

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In a media briefing after the Agoa summit, Tau expressed his hopes that South Africa’s benefits would be renewed before the US elections in November 2024, indicating that the “least favorable” outcome would be a delay in the decision on Agoa until 2025.

Trade dynamics under Trump

Trump’s potential re-election in November raises apprehensions about a possible global trade conflict if he pursues his promise to implement tariff increases.

South Africa may come under examination not only for its position on Israel and its links with Russia but also its membership in the Brics association.

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In early December, Trump warned on his social media platform Truth Social that Brics nations risk “100% tariffs” if they establish a new currency to replace the dollar.

“We demand assurance from these nations that they will neither create a new Brics currency nor support any other currency to replace the mighty US dollar, or else face 100% tariffs and lose access to the splendid US market,” Trump proclaimed.

Trade statistics between US and SA

Over the last five years, South Africa’s exports to the United States have risen significantly, climbing from US$1.9 billion (approximately R35.2 billion) in 2019 to $3.3 billion (R61.12 billion) in 2023, aided by Agoa and the Generalized System of Preferences (GSP) initiative.

In 2023, 25% of South Africa’s total exports to the US were conducted under Agoa and GSP, with Agoa contributing 21% of that figure, as noted by Tau.

Notable exports from South Africa under Agoa encompass automotive parts, ferro-alloys, citrus fruits, jewelry, nuts, chemicals, wines, and vessels.

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According to Tau, Agoa, established under President Bill Clinton in 2000 and extended two times, is scheduled to expire at the end of September 2025.

There are hopes for its renewal by the US government.

“South Africa, aligned with continental efforts, has urged Congress to consider renewing Agoa for a minimum of 16 years while retaining all countries in the program to bolster and develop regional value chains,” Tau stated.

“Keeping all beneficiary nations will ensure that Agoa continues to support the African Continental Free Trade Agreement and fosters the continent’s regional integration initiatives.”

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