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AGOA forum to remain in SA, country says, despite US push to punish SA

AGOA forum to remain in SA, country says, despite US push to punish SA
DIRCO headquarters, South Africa

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Published date:
Monday, 12 June 2023
Author:
THANDO MAEKO

The South African department of international relations and co-operation (DIRCO) is adamant the AGOA Forum, which is intended to map the way forward for US-SA trade relations, will still be hosted in SA, despite a push by Washington’s legislators to move the conference to another country. 

“There is no decision by the state department/White House to move the Agoa (African Growth and Opportunity Act) Forum from SA,” said Dirco spokesperson, Clayson Monyela. 

“President Cyril Ramaphosa’s special envoys recently visited the US ... explain SA’s active non-aligned position on the Russia-Ukraine conflict to key stakeholders and decisionmakers. Our diplomats in Washington continue to engage on these matters.”

The Agoa Forum is likely to be held after the Brics (Brazil, Russia, India, China, SA) summit, where the presence of Russian President Vladimir Putin is uncertain because the International Criminal Court (ICC) has issued a warrant of arrest against him. Should Putin arrive in SA for the summit in August, Ramaphosa’s administration would be compelled to arrest him which the government has previously said would be tantamount to declaring war against Moscow. 

The Agoa trade pact allows preferential access to some SA products to the US markets. The current 10-year cycle ends in 2025. SA’s stance on the East European conflict has raised fears among market watchers that SA could be excluded from the deal.

The renewal of SA's eligibility for the trade pact has been threatened after a group of bipartisan US legislators asked the US government to reconsider Pretoria hosting 2023 Agoa Forum due to its alleged closeness to Russia. 

The request was sent to US secretary of state Anthony Blinken, national security adviser Jacob Sullivan and ambassador of US trade Katherine Tai last week, and comes as US-SA relations take strain after Washington accused SA of providing weapons to Russia in its war with Ukraine.

The SA government denied the accusation and has a launched a probe into the matter headed by retired judge Phineas Mojapelo.

“Further, these actions by SA call into question its eligibility for trade benefits under Agoa due to the statutory requirement that beneficiary countries do not engage in activities that undermine US national security or foreign policy interests,” the letter reads.

“While we understand that the Agoa eligibility review process for 2024 is under way and that decisions have not yet been made, we question whether a country in danger of losing Agoa benefits should have the privilege of hosting the 2023 Agoa Forum.”

The request, sent by the US legislators, is an early indication of the US’s willingness to penalise SA for its perceived alliance to Russia, which the Ramaphosa administration has denied, saying that it has remained nonaligned in the conflict between Moscow and Kyiv.

One of the conditions of trade with the US is that its trade partners should not engage in activities that harm Washington’s national security interest or provide support for acts of international terrorism, and co-operates in international efforts to eliminate human rights violations and terrorist activities.

Any negative shift in trade relations between the US and SA would have a devastating effect on the local economy as the country battles the electricity crisis, which is hampering growth prospects.

SA qualifies for preferential trade benefits under the Agoa which permits SA to export more than 7,000 goods to the US duty-free.

Meanwhile, Western Cape premier Alan Winde is leading a delegation from the provincial government and Wesgro, the entity responsible for the promotion of business in the province, to the US in a bid to retain SA’s Agoa eligibility. 

Winde said the Western Cape’s economic losses would be higher than the rest of the country should SA lose its Agoa eligibility due to higher trade tariffs, which have been tempered by the act. The province’s lucrative agriculture sector would suffer the most.

“There are concerns related to security matters but it is also in the interests of the US to keep growing the potential future benefits the statute aims to foster and create.”

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