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
Author:
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.

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