Gov’t delegation heads to US to try to save trade deal

A government delegation will embark on a charm offensive in the US this week in a bid to defuse tensions with South Africa’s second largest trading partner over foreign policy and retain its preferential access to American markets.

Finance minister Enoch Godongwana is among those who plan to meet with US politicians and lobby for South Africa to retain its eligibility to export goods duty free to the US under the African Growth and Opportunity Act (Agoa). The officials also intend to try and dispel what the government has termed misinformation about its stance toward Russia’s war in Ukraine.

South Africa has maintained what it terms a non-aligned position towards the invasion, a stand that has irked Washington. Tensions spiked earlier this year when the US ambassador to South Africa, Reuben Brigety, accused South Africa of supplying arms to Russia — an allegation Pretoria denied.

Several US lawmakers have called on President Joe Biden’s administration to reconsider whether South Africa should continue to benefit from Agoa. Besides being angered over South Africa’s foreign policy stance, some legislators argue that the country is too developed to participate in the programme.

“There’s no officially expressed view that seeks to exclude South Africa from Agoa,” said Vincent Magwenya, President Cyril Ramaphosa’s spokesman. “This is despite some politicians in the US lobbying for our exclusion. Agoa is coming up for renewal towards the end of this year, and naturally it will be reviewed as it happens with all trade agreements. That review will not only apply to South Africa but to all participating countries.”

Agoa expires in 2025 and US officials have previously said the qualifying criteria may be revised or the programme may be replaced. South Africa ships cars and agricultural produce to the US under the accord. Last year, it exported US$2.7-billion worth of goods using Agoa and the so-called Generalised System of Preferences.

Global alliances

The Democratic Alliance has waged its own campaign for South Africa to continue participating in Agoa and warned that its exclusion would have a devastating impact on the economy, with the vehicle manufacturing industry among those that would be badly affected.

“Should South Africa’s access to Agoa be revoked as a consequence of its allegiance to Russia, 112 000 jobs in the automotive sector and R435-billion in automotive trade could be wiped out,” the party said in a statement on Tuesday. “South Africans need to realise that our country’s jobs and the security of our economy are intrinsically linked to trade founded on global alliances.”  — S’thembile Cele, (c) 2023 Bloomberg LP

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