SA urges US to hasten trade pact with two-step renewal

South Africa will seek to retain its preferential trade access to the US, which is due to expire in 2025, while also seeking ways to refine the treaty to allow more exports to the world’s biggest economy.

The authorities have “raised with the US the possibility of a two-stage renewal and improvement program so that we move rapidly to consolidate what we have and then sit down and work through how we can improve it,” Minister of Trade and Industry Ebrahim Patel said. “In the end it’s going to be some kind of hybrid, some kind of blend of this,” he said in an interview on Johannesburg-based radio station SAfm on Monday.

South Africa last week hosted a three-day annual forum on the African Growth and Opportunity Act, which gives more than 30 African nations duty-free access to the US. In December, American and African trade officials agreed that Agoa’s current iteration needs modernization and stronger implementation.

An extension and changes would require approval from US lawmakers.

President Joe Biden last week said he strongly supported Agoa’s re-authorisation and urged Congress to act in a timely fashion, marking his latest move to signal US commitment to a region that is being courted aggressively by China.

Some US lawmakers have separately 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, its stance on the Israel-Hamas war and because they deem it too developed to qualify.

Eligibility is contingent on countries establishing or making continual progress toward establishing a market-based economy and respecting the rule of law. They also have to eliminate barriers to US trade and investment, enact policies to reduce poverty and combat corruption, and protect human rights.

South Africa ships cars, iron and steel and agricultural produce to the US under the accord. Last year, Agoa exports represented more than a fifth of total South African shipments, up from 13% in 2021.

“The appetite for the extension of Agoa has grown enormously and that’s been the first part of what South Africa is seeking to do,” Patel said. “Once we’ve got that locked in, then it’s a matter of now ensuring that we’ve got the widest coverage.”