Trade minister says South Africa values trade with US ‘enormously’ amid AGOA fears
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
View related news articles
The Lady R and AGOA — take a lesson from Warren Buffet and make a case for the intrinsic value of SA Inc
Our agricultural sector’s relationship with the US is a two-way stream that is mutually beneficial based on intrinsic value. When preparing for the Agoa summit, this is the narrative we should be pushing. The comments by US Ambassador Reuben Brigety regarding theLady R shipments sent the South African currency plummeting and inflamed fears about South Africa’s future trade relations with the US. This is a high-stakes issue for...
24 May 2023
Without AGOA South African citrus loses its edge in the US
South Africa’s citrus exports to the United States have over recent years grown to a value of $132m (2022), a consistent performer during the past few turbulent seasons – but it is at risk if the United States decides not to extend their free trade agreement with South Africa due to the latter’s recent closeness to President Putin.During the Clinton administration the United States introduced AGOA, the African Growth and Opportunity Act,...
23 May 2023
South Africa says it is in its ‘own interest’ to probe Russia arms claim
The national security adviser to South Africa’s president Cyril Ramaphosa said it was in his country’s “own interest” to investigate a US accusation that arms were covertly transported to Russia from a Cape Town naval base, as Pretoria tried to calm a diplomatic storm. In an attempt to emphasise South Africa’s neutrality in the conflict between Russia and Ukraine, its foreign ministry said that Ramaphosa would speak to Ukraine’s...
13 May 2023
US allegations that South Africa shipped arms to Russia puts AGOA at risk
The United States (US) has accused the South African government of supplying ammunition to the Russian Federation through a ship that docked at a naval base in Simon’s Town in South Africa’s Western Cape province late last year. This shock allegation highlights the increasingly strained relations between the US and South Africa and places billions of Rand worth of preferential trade between the countries at risk. “We are confident that...
12 May 2023
Ramaphosa delegation in the US to persuade Washington not to drop South Africa’s trade benefits
President Cyril Ramaphosa’s national security adviser Sydney Mufamadi is in Washington at the head of a delegation lobbying the Biden administration and congressional leaders. This comes amid concerns that South Africa’s controversial stance on Russia’s war against Ukraine is jeopardising SA’s economic and political relations with America. Sydney Mufamadi’s team is likely to focus its efforts on trying to ensure that South Africa...
27 April 2023
South African fruit exporters will closely watch discussion on AGOA
South Africa’s citrus sector in the western parts of the country has always retained a keen interest in US political views over promoting African trade to the US Promoting better access for Africa into the US is done mainly under the AGOA (African Growth and Opportunities ACT) which have benefited exporters from Africa since 2000. It will now be under review and perhaps re-negotiated during the next year if a new act has to come into...
25 April 2023
Opinon: 'Is it worth antagonising the US with Russia and China relations?
In the middle of an energy crisis and greylisting, SA could do without antagonising one of its biggest trade and investment partners. When SA welcomed the Russian warship Admiral Gorshkov — with the Kremlin’s pro-war symbol, the letter “Z”, on prominent display — it sparked a new diplomatic crisis with the US that could have profound economic consequences. This past week the US Congress introduced a resolution to...
26 February 2023
US treasury secretary Janet Yellen touts deeper ties with South Africa to help boost trade
The US is seeking to deepen its economic integration with South Africa in pursuit of policies to diversify global supply chains, US Treasury Secretary Janet Yellen said. Closer ties with nations that share the US’s economic values will help promote so-called friendshoring, in which allies cooperate on manufacturing and sourcing raw materials, Yellen said at a meeting with South African Finance Minister Enoch Godongwana on...
25 January 2023
Ramaphosa vows to improve investment environment for US companies after talks with Biden
There was agreement on the need to create a more attractive environment for American companies to invest in South Africa. These are just some of the sentiments echoed by President Cyril Ramaphosa as he concluded his official working visit to the United States at the invitation of US President Joe Biden. Ramaphosa landed on Thursday in Washington DC, in the United States of America. The two leaders deliberated on a range of critical...
18 September 2022
'The renewal of AGOA is vital' - SA President Ramaphosa
Address by President Cyril Ramaphosa during the meeting with the congressional black caucus and anti-apartheid veterans during his visit to the United States: Minister of International Relations and Cooperation of South Africa, Dr Naledi Pandor South Africa’s Ambassador to the United States, Ms Nomaindia Mfeketo Chair of the Congressional Black Caucus, Ms Joyce Beatty Spokesperson of the Rainbow Push Coalition, Prof Jonathan Jackson...
16 September 2022