Parks Tau, the Minister of Trade, Industry, and Competition, has expressed his appreciation for the United States’ decision to permit South Africa to continue enjoying the benefits of the African Growth and Opportunities Act (AGOA) for an additional year. He stated on Monday that this development “offers a solid foundation to enhance SA-US relations.”

The announcement from the Biden administration came shortly before the inauguration of President-elect Donald Trump in January. This extension guarantees South Africa’s participation in the program for at least another year, although the South African government intends to persuade Trump during next year’s review and the upcoming G20 Summit in Johannesburg.

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Thanks to AGOA, South Africa and 31 other sub-Saharan African nations have access to US markets without duties.

In a statement released on Saturday, December 21, US Trade Representative Sam Michel confirmed that the list of countries eligible for AGOA remains the same, as does the list of ineligible countries.

“Based on the results of 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 maintain AGOA benefits for all currently eligible countries,” Michel stated.

“South Africa looks forward to working with the US on areas of mutual benefit,” noted Tau.

The minister also welcomed the omission of provisions related to the review of SA-US relations in the National Defense Authorization Act that has been sent to Biden for his signature.

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In June, the US House of Representatives passed legislation mandating a comprehensive review of the US-South Africa relationship by the Biden administration.

This was triggered by South Africa’s connections with Russia, China, and Iran, leading to an evaluation of whether these ties could pose a threat to US national security.

SA Lobbying Efforts

Since the formation of the government of national unity (GNU), significant efforts have been made by the executive to enhance relations with the US.

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

Prior to Lamola’s trip, Tau along with his deputy Andrew Whitfield had been in the US from July 24 to 26 for the 21st AGOA Summit.

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Briefing the media following the AGOA summit, Tau conveyed his optimism that South Africa’s benefits would be renewed before the upcoming US elections in November 2024. He emphasized that the “least ideal” outcome would have been to postpone any decision on AGOA until 2025.

Trade Under Trump

Trump’s potential reelection in November raises apprehensions over the possibility of a global trade war if he carries out his threats of tariff hikes.

South Africa may be at risk due to its position on Israel, relations with Russia, and its membership in the Brics group.

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In early December, Trump warned via his social media platform, Truth Social, that Brics countries might face “100% tariffs” if they attempt to establish a new currency to replace the US dollar.

“We require a commitment from these nations that they will not create a new Brics currency or support any other currency to supplant the mighty US dollar; otherwise, they will face 100% tariffs and should expect to bid farewell to selling in the splendid US economy,” Trump declared.

US-SA Trade Statistics

South Africa’s exports to the US rose significantly from $1.9 billion (around R35.2 billion) in 2019 to $3.3 billion (R61.12 billion) in 2023 under AGOA, which includes the Generalized System of Preferences (GSP) initiative.

In 2023, 25% of South Africa’s total exports to the US were under AGOA and GSP, with AGOA accounting for 21% of this total, according to Tau.

The primary exports from South Africa under AGOA include automotive products and parts, ferro-alloys, citrus fruits, jewelry, nuts, chemicals, wines, and ships and boats.

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According to Tau, AGOA, initiated under President Bill Clinton in 2000 and extended twice, is set to expire at the end of September 2025.

There are hopes for its extension by the US.

“As part of continental efforts, South Africa has urged the US Congress to consider extending AGOA for at least an additional 16 years, keeping all countries in the program to maintain and develop regional value chains,” Tau stated.

“Retaining all beneficiary countries will also ensure that AGOA supports the African Continental Free Trade Agreement and, more broadly, the continent’s regional integration initiatives.”

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