- African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/South Africa puts trade on top of agenda for Ramaphosa’s meeting with Biden

South Africa puts trade on top of agenda for Ramaphosa’s meeting with Biden

South Africa puts trade on top of agenda for Ramaphosa’s meeting with Biden
Published date:
Thursday, 15 September 2022
Peter Fabricius

Winning the US president’s support for a further extension of the Africa Growth and Opportunity Act, which gives South African exports duty-free and quota-free access to the lucrative US market, will be a high priority for Pretoria.

Trade, rather than the war in Ukraine, is likely to top the agenda of President Cyril Ramaphosa’s meeting with US President Joe Biden at the White House on Friday.

That, at least, is how Pretoria sees it. However, Pretoria came a little closer this week to condemning Russia for its invasion of Ukraine, perhaps in preparation for the meeting with Biden. 

But winning Biden’s support for a further extension of the Africa Growth and Opportunity Act (Agoa), which gives South African exports duty-free and quota-free access to the lucrative US market, will certainly be a higher priority for Pretoria.

International Relations and Cooperation Minister Naledi Pandor noted in Washington this week that Agoa is due to expire in 2025 and that Pretoria hopes that it will be extended beyond that date. Agoa has boosted South African exports to the US, especially in value-added goods, such as cars, as she pointed out.

AGOA extension

She indicated that South Africa would push for an Agoa extension when it hosts the Agoa Forum next year. But it is not clear that the US Congress will be ready to extend Agoa again as it did in 2015. There is a strong lobby in the US calling for Agoa — which provides no benefits for US exports entering African markets — to be replaced by conventional, reciprocal free trade agreements, perhaps with different African regions.

Speaking at the Council on Foreign Relations, Pandor ranked trade as SA’s top priority as it was vital for the economic growth it needed to address its challenges, such as poverty and unemployment.

Agoa has helped to make the US the second-largest destination for South Africa’s exports globally, Ramaphosa noted this week. He added that the US accounts for 17.4% of total South African outward investment to the world. 

Insecurity, instability and health in Africa

Pandor mentioned insecurity and instability in Africa as the next most important issue Ramaphosa would likely raise with Biden. The third priority would be health, particularly preparing for pandemics. 

“President Biden has been vocal in supporting our initiatives to have Africa do more in innovation, science and research in order for it to have the ability to produce treatments on the continent as well as diagnostic and other tools,” Pandor said. 

She said Ramaphosa would urge Biden to put US support behind strengthening the ability of the United Nations to deal with Russia’s war against Ukraine, and other global security crises. The absence of the UN and its secretary-general, António Guterres, from efforts to end the war was disappointing, particularly as Russia was a permanent member of the UN Security Council, she said.  

When the moderator of the discussion, the former US ambassador to South Africa Jendayi Frazer, asked Pandor what could be done to fix the “rocky relationship” between the US and South Africa, Pandor disagreed that this was the case, saying relations were “very good”.

Russian invasion

When Frazer demurred,  putting it to her that South Africa had always been much sharper in criticising the US — for example, its invasion of Iraq — than it had been in criticising Russia’s invasion of Ukraine, Pandor came closer than ever before to a condemnation of Russia.

“We’ve been clear in our view that war doesn’t assist anyone and we believe the inhumane actions we have seen against the people of Ukraine can’t be defended by anybody,” Pandor said.

“And we’ve not defended them, nor have we been neutral. We’ve been clear.”

Pandor quickly added, though, that Russia — in its previous incarnation as the Soviet Union — had supported South Africa’s liberation struggle “when many governments were working very closely with the apartheid state, and even murdering our leaders. So we can’t suddenly forget that history and behave in a different way.”

It is possible that Ramaphosa could raise with Biden South Africa’s concerns about the proposed Countering Malign Russian Activities in Africa Act. This legislation would authorise the US government to sanction Russian companies and entities operating in Africa — and the African companies and entities that do business with them.

The bill passed easily in the House of Representatives in April, but has stalled in the Senate. South African officials claim credit, saying White House sources have told them the Senate won’t pass the bill, or if it does, Biden won’t sign it into law. But Ramaphosa is likely to seek that assurance from Biden himself.

Climate crisis

The climate crisis is also expected to figure in Ramaphosa and Biden’s discussions, Pandor suggested. The US, the UK, France, Germany and the European Union have pledged $8.5-billion in financing for South Africa’s Just Energy Transition Programme. This would help South Africa transition from its huge dependence on coal-fired electricity production towards renewables, but in a way that would protect the livelihoods of the many communities now dependent on coal. 

Pandor expressed concern that a large part of the $8.5-billion would come in the form of loans rather than grants — adding to South Africa’s already large debt. 

Ramaphosa will also meet congressional leaders and veterans of the US civil rights movement who supported the struggle against apartheid. On Saturday, he will fly to London to attend ceremonies around the death of Queen Elizabeth, including her funeral on Monday.

Read related news articles

South Africa walks a tightrope on US relations

South Africa has been conducting a high-wire act in its relations with the United States (US). It is maintaining friendships with Washington’s enemies like Russia, Iran and China while trying to avoid disrupting its economic relations with America. Tensions came closer than ever to breaking point this month as the US House of Representatives’ Committee on Foreign Affairs passed the US-South Africa Bilateral Relations...

28 March 2024

Remarks by Deputy Treasury Secretary Adeyemo on the US-South Africa economic relationship

As Prepared for Delivery in Johannesburg, South Africa Thank you for the warm welcome. I want to express my gratitude to Consul General Spera and the American Chamber of Commerce for hosting me. I am honored to be joined today by South African Entrepreneurs that are building companies to unlock the economic potential of their country.  I owe my own presence here today to the inspiration I drew from South Africa. In the middle of the...

13 March 2024

USTR releases President Biden’s 2024 trade policy agenda and 2023 annual report

The Office of the United States Trade Representative today released President Biden’s 2024 Trade Policy Agenda and 2023 Annual Report to Congress, which details USTR’s work to advance President Biden’s trade agenda.  The President’s 2024 Trade Policy Agenda stands up for workers’ rights and sustainable trade practices, supports U.S. farmers, ranchers, fishers, and food manufacturers, bolsters supply chain resilience,...

05 March 2024

South African president Ramaphosa meets with US congressional delegation

South African President Cyril Ramaphosa today, 21 February 2024, received for a visit from a bipartisan congressional delegation from the United States of America, in Tuynhuys, Cape Town. The delegation is visiting South Africa at the invitation of the Aspen Institute. The President and the US congressional delegation discussed the importance of the relationship between South Africa and the US, which manifests in strong economic,...

21 February 2024

US congress receives Bill to review South Africa relations

A bill has been submitted to the United States congress calling for a full review of the country’s bilateral relationship with South Africa following the International Court of Justice ruling that found it plausible that Israel has committed acts of genocide against Gaza. The bipartisan bill which was introduced by US Republican congressman John James and Democratic Party congressman Jared Moskowitz this week could threaten South...

09 February 2024

Fitch research unit expects better AGOA deal for South Africa

Fitch’s research arm, BMI, believes SA has done enough to get improved trade terms under the African Growth & Opportunity Act (Agoa), which it expects to be extended and modified before its expiry in September 2025. But it warns that the deal might be stillborn if Donald Trump is elected US president. The research think-tank said in a note it assigns a 65% probability that Agoa will not only be renewed but modified to the benefit of...

09 January 2024

South Africa: BLSA CEO calls for more companies to leverage AGOA opportunities

Many more South African companies could benefit from the African Growth and Opportunity Act (AGOA), which gives eligible countries access to US markets free of tariff barriers, business organisation BusinessLeadership South Africa (BLSA) CEO Busi Mavuso writes in her weekly newsletter. Apart from mainstream formal sector businesses, there are opportunities to enable more entrepreneurs, including women-led...

20 November 2023

US ambassador: AGOA is an opportunity to deepen ties between the US and South Africa

President Joe Biden last December at the US-Africa Leaders Summit affirmed that the US will elevate its relationship with Africa. The future is Africa. One example is its youthful population: the median age on the continent is 19. By 2050, one in four people in the world will be in Africa. The US wants them to be healthy and wealthy. What happens in Africa will affect the rest of the globe — and we want to work together to ensure it is...

09 November 2023

US Senator Chris Coons proposes AGOA extension by 16 years, immediate review of SA’s AGOA eligibility

Powerful US Democratic Party Senator Chris Coons is circulating a discussion draft of a Bill to renew the African Growth and Opportunity Act (Agoa) for 16 years that would also require an immediate “out-of-cycle” review of South Africa’s eligibility for Agoa. That could lead to South Africa being removed next year from the programme, which has provided considerable benefits to SA exporters to the US of cars, fruits and wine, in...

07 November 2023

AGOA benefits extend beyond trade [incl. VIDEO of Friday's opening session]

Economies in Sub-Saharan countries stand to benefit far more from the African Growth and Opportunity Act (AGOA) than notable trade statistics, says President Cyril Ramaphosa. “AGOA enhances the diversification of African economies, enabling them to export value-added products. By enabling African countries to have preferential access to the US market, this opportunity incentivises African countries to develop and export value-added goods...

06 November 2023

South Africa pins its hopes on an early 2024 US Congress renewal of AGOA

South Africa’s government is hoping that the process to renew the African Growth and Opportunity Act (Agoa) by the US Congress will be concluded by early 2024, ensuring that more than 20 African countries continue to have duty-free access to the world’s largest economy.   This is the first time that the South African government has given a timeline for when it hopes the US Congress might extend Agoa, which has been renewed twice...

05 November 2023

You are here: Home/News/Article/South Africa puts trade on top of agenda for Ramaphosa’s meeting with Biden