Agoa.info - African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/Trade minister says South Africa values trade with US ‘enormously’ amid AGOA fears

Trade minister says South Africa values trade with US ‘enormously’ amid AGOA fears

Trade minister says South Africa values trade with US ‘enormously’ amid AGOA fears
Published date:
Wednesday, 24 May 2023
Author:
Terence Creamer

Amid diplomatic tensions with the US over an alleged sale of arms to Russia, South Africa is continuing to make the case for its ongoing designation as a beneficiary of the Africa Growth and Opportunity Act (AGOA), which extends preferential trade access to the giant American market on certain goods and is due to expire in 2025.

In a briefing ahead of his Budget Vote, Trade, Industry and Competition Minister Ebrahim Patel said that he shared the anxiety expressed by Finance Minister Enoch Godongwana about the potential negative effects of any fallout with the US over the alleged sale of weapons or ammunition to Russia, as well as about the prospect of South Africa losing its Agoa designation.

Godongwana said he viewed the allegations in a “very serious light because we are running an economy that is already in junk status and grey listed, and any further action by the international community will exacerbate the problem”.

The Finance Minister noted the allegations, together with the negative perceptions they generated, had already been felt in the currency market.

He expressed concern that the trade and investment channels could be similarly disrupted should the US take punitive measures against South Africa if it was found to have breached its non-aligned policy stance in relation to the war in Ukraine.

Patel noted that a significant share of South Africa’s exports to the US benefitted from the preferences granted under Agoa, even though other products entered the market under the Most-Favoured-Nation treatment provided for under World Trade Organisation rules.

“We will and we should do everything possible to retain that [Agoa access],” Patel said.

“It strengthens the position of South African exporters in the US market and, of course, that helps to create more jobs locally.”

He said that South Africa, along with other African countries, had made the case for an early extension of Agoa during meetings in Washington DC in December and that South Africa would continue to seek an early confirmation, even though historically the US Congress had only granted extensions in Agoa’s final year.

However, this appeal for an early extension was made ahead of the press conference at which US Ambassador to South Africa Reuben Brigety alleged that defence equipment had been secretly loaded onto a Russian cargo ship at the Simon’s Town naval base in December.

While there has since been something of a lull after Brigety was hauled before International Relations Minister Naledi Pandor for making undiplomatic statements, as well as to allow for the inquiry into the matter by a retired judge appointed by President Cyril Ramaphosa to run its course, concerns continue to simmered over South Africa’s status as an Agoa beneficiary.

Patel said South Africa would continue to actively lobby for a continuation of the country’s Agoa designation.

“[But] at this stage what we are able to say publicly is that we value the relationship with the United States enormously.

“We will be working closely with the US administration in making the case for why South Africa should remain in Agoa and we hope that we are successful.”


Video: South Africa's opposition party lobbies US over AGOA

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

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

SA trade minister Patel expresses confidence at media briefing about South Africa’s continued inclusion in AGOA

Ahead of South Africa hosting the US-AfricaTrade and Economic Cooperation Forum – also called the AGOA Forum – from November 2 to 4, Trade, Industry and Competition Minister Ebrahim Patel on October 26 briefed the media on the state of readiness for the forum, expressing confidence that the South African government’s relations with the US were strong. Various South African stakeholders have been motivating for...

26 October 2023

You are here: Home/News/Article/Trade minister says South Africa values trade with US ‘enormously’ amid AGOA fears