- 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

Renewed commitment: South Africa to host AGOA summit amid calls for extension

South Africa is set to host the African Growth and Opportunity Act (AGOA) Summit later this year, despite recent diplomatic tensions between the country and the United States (US). In June this year, US legislators called for the relocation of the summit due to controversy surrounding alleged arms shipments to Russia by South Africa. Cleared of any wrongdoing by an internal judicial panel, the US has reaffirmed its commitment to shared growth...

21 September 2023

South Africa confirmed as AGOA host country for 2023

United States Trade Representative Katherine Tai and South African Minister of Trade, Industry and Competition Ebrahim Patel today announced that the Government of South Africa will host the 20th US-sub-Saharan Africa Trade and Economic Cooperation Forum (AGOA Forum) in Johannesburg, from November 2-4, 2023. The Forum will bring together the governments of the United States and AGOA-eligible countries, as well as representatives from key...

20 September 2023

South Africa well positioned as Africa's industrial centre: President Ramaphosa

President Cyril Ramaphosa has told American business representatives that Africa is ready for new investment and strong partnerships. The President was delivering remarks at the US - South Africa Trade and Investment Business Roundtable Dialogue in New York on Monday.  “Africa is ready for new investment and strong partnerships. South Africa is well positioned as the continent’s industrial centre, with deep capital markets, the rule...

19 September 2023

US Chamber of Commerce hosts South African president Ramaphosa to deepen bilateral trade, investment ties

The U.S. Chamber of Commerce is organizing a record number of meetings and events on the sidelines of the 78th session of the UN General Assembly (UNGA) to help foster public-private collaboration and underscore the indispensable role of the private sector in realizing the UN’s global targets. As part of this effort, the U.S. Chamber’s U.S.-Africa Business Center (USAfBC) today hosted the U.S.-South Africa Trade and Investment Executive...

18 September 2023

South Africa: Trade high on Ramaphosa’s US agenda

In an effort to extend South Africa’s preferential trade agreement with the US, trade, industry & competition minister Ebrahim Patel is holding high-level meetings with US legislators ahead of the UN General Assembly this week.  President Cyril Ramaphosa is understood to have attended some of the meetings, including with senator Gregory Meeks, the foreign affairs committee chair who called on the US to strip SA of the right to...

17 September 2023

South Africa and the US aim to put AGOA storm behind them

The coming AGOA forum, intended to map the way forward for US-SA trade relations, presents an opportunity for SA and the US to move on from the diplomatic storm stemming from perceptions that Pretoria sides with Russia in its war on Ukraine, says a top Washington official.  SA-US tension escalated in May after US ambassador to Pretoria Reuben Brigety accused SA of providing arms to Russia in December 2022. The presidency released a...

14 September 2023

Loss of ‘bedrock’ AGOA will hurt South African motor industry, warns new report

Loss of access to US trade benefits through the African Growth and Opportunity Act (Agoa) would hurt not only the SA motor industry but also many more across Africa that depend on it for their future growth, says a new report.  Attempts to create a pan-African motor industry and quintuple the size of the continent’s new-vehicle market could be undermined if the SA industry, the strategy’s main driver, is weakened, the report by motor...

02 September 2023

A warming between South Africa and the US on the eve of BRICS summit

On the eve of the 15th BRICS summit, both SA and US diplomatic sources say they believe that relations between the two countries have improved, with the US adding that there has been more engagement in the past six months than in the past decade. The BRICS summit, which starts in Sandton on Wednesday afternoon, will highlight SA's relationship with two of the US's global opponents: Russia, with which it is indirectly at war, and China, with...

22 August 2023

South Africa: $1bn citrus industry highlights importance of inclusion in AGOA

On Friday, the Standing Committee on Finance, Economic Opportunities and Tourism met with key stakeholders in the citrus industry at Market Demand Fruits, Stellenbosch. The meeting focussed on the detrimental impact on citrus exports to the United States should South Africa not be included in the reauthorisation of the African Growth and Opportunity Act (AGOA). These stakeholders included representatives from Summer Citrus South Africa,...

20 August 2023

Rhetoric aside, the US needs South Africa inside the AGOA tent, not outside

The South African government sent a senior ministerial delegation to the US to make its case for keeping South Africa as a beneficiary of its trade preferences under the African Growth and Opportunity Act (AGOA). Most commentators focus on the benefits of Agoa to South Africa, but there are good reasons that it is very much in America’s interests to keep South Africa as a trading partner and within its sphere of influence through Agoa...

27 July 2023

South Africa asks US for early AGOA extension

South Africa has asked the US to consider an early extension to the African Growth and Opportunity Act (Agoa), saying this would provide certainty for investors and encourage them to commit additional investment on the continent. Trade, industry & competition minister Ebrahim Patel said the expeditious renewal trade agreement, which gives SA and other sub-Saharan African countries preferential access to US markets, would be beneficial not...

25 July 2023

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