TRALAC - Trade Law Centre

The future of US-SA business relations in a post-election world - US Ambassador Gaspard

Wednesday, 30 November 2016

South Africa’s success is a necessary condition for the progress of the African continent, according to outgoing United States ambassador to South Africa Patrick Gaspard.

He was speaking at the Gordon Institute of Business Science recently.

In one of his last addresses as the end of his tenure in the country approached, Gaspard said fears around the continued existence of the African Growth and Opportunity Act (Agoa) trade agreement under the incoming Donald Trump administration were unfounded.

South Africa and the United States have long enjoyed a “broad and deep” relationship and it would be “difficult to imagine a future where it would not remain strong”.

AGOA – A partnership for prosperity

Following the recent presidential election, in which Trump promised to eradicate all trade partnerships not beneficial to American workers, Gaspard explained the Agoa treaty had been ratified by the United States Congress, and that only Congress could enact any changes to the agreement in the future.

Agoa extends preferential access to the US for African countries until 2025.

“Elected officials do realise that we live in an increasingly interconnected world,” he said.

A self-confessed optimist, Gaspard maintained that: “We have already seen a certain amount of shifting and softening on positions proposed during the campaign, and I am increasingly optimistic that the incoming administration will come to view South Africa as a key partner, as it has been for many years.”

Gaspard said he was especially proud of the unprecedented 10-year renewal for the Agoa agreement.

“The treaty allows South African goods access to the most powerful consumer economy in the world.”

However, he cautioned: “Ten years will go by in a flash. We have to be forward looking and do the hard work in the next few years, or we will disadvantage South Africans.”

Bipartisan relations in an uncertain world

Gaspard said one of the greatest exasperations of his time as ambassador was that trade talks didn’t touch on areas of strength for both economies.

South Africa should be the engine of the services economy for sub-Saharan Africa.

Other opportunities include increasing the capacity of the port of Durban to get goods to market quicker; improving the information and communication technology space in South Africa and exploiting strengths in pharmaceuticals and intellectual property “so as to allow South Africa to become the leader it should be” in these fields.

“The United States sees the need for a mature, balanced and mutually beneficial relationship, and based on recent talks with the department of trade and industry, we are confident that South Africa sees that need as well.”

Gaspard said that while Agoa is the central element of our trade relationship, it could achieve but so much.

He rather proposed a series of smaller, short-term agreements to set out sectors of cooperation and outline reasonable, achievable goals.

These smaller agreements would focus on a range of topics important to both countries, including the protection and use of intellectual property; the protection of labour rights; trade facilitation; bilateral investment issues and fostering trade in services.

SA’s future direction

Gaspard told the audience he believed “there is a long term future here in South Africa, if one is willing to deal with just a little bit of turbulence”.

However, he warned that the country’s “incredible experiment will collapse under the weight of its own myths if economic malaise is allowed to take hold.”

Economic growth on the continent can only be sustained if South Africa succeeds:

“A humming, well-working South Africa can have an outsized impact on the continent. But we should all be a bit troubled by low growth rates and find some urgency in the moment.

"Africa is not looking for aid, but for trade which can help achieve growth, self-determination and empowerment.”

Gaspard said he was troubled by the regressive trend in the number of black chief executives and reduced representation of black managers at middle and senior levels in business he had seen since arriving in the country in 2014.

“The country needs a proper economic transformative roadmap that inserts black people into the centre of the economy in order to provide a vision of hope and inclusion,” he said.

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