- African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/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

AGOA forum to remain in SA, country says, despite US push to punish SA
DIRCO headquarters, South Africa
Published date:
Monday, 12 June 2023

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.”

Read related news articles

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

Exploring synergies between AGOA and AfCFTA: The case for African exports

Africa is often characterised as a continent poised for economic growth and development. Often, prosperity and development in Africa can be linked back to exports and the benefits that they generate. This brings to the forefront the African Growth and Opportunity Act (AGOA) and its role in opening American markets to 35 African countries, as well as the African Continental Free Trade Area (AfCFTA), which aims to increase socio-economic...

09 November 2023

African and US trade unions call for decent work in trade and economic cooperation

The African Growth and Opportunity Act (AGOA) Forum took place in Johannesburg, South Africa, 2-4 November, to strategize ways to strengthen an inclusive trading partnership between the US and 35 eligible African countries.  AGOA is a US law which was signed in 2000 aimed at creating duty free access for eligible African countries to the US markets. Eligibility criteria includes adopting market-based economies, the rule of law, political...

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 extension crucial for Ghana’s industrialisation

The Deputy Minister of Trade and Industry Nana Ama Dokua Asiamah-Adjei is supporting the push for the extension of the African Growth and Opportunity Act (AGOA) to enhance trade between Ghana and the US. A United States Trade Act enacted on 18 May 2000 as Public Law 106 of the 200th Congress, the AGOA legislation has been renewed on different occasions, most recently in 2015, when its period of validity was extended to September 2025. The...

06 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

Protection likely for African countries that outgrow AGOA

The improved agreement of the African Growth and Opportunity Act (AGOA), due to expire in 2025, is likely to have fewer requirements for graduation from the programme to avoid beneficiaries losing out on the lucrative commercial ties with the US, says a top Washington diplomat. The legislation, which was enacted in 2000 and allows Sub-Saharan African countries preferential access to US markets, requires that beneficiaries be graduated out of...

06 November 2023

Uganda criticises US plan to exclude it from duty-free trade programme

Uganda on Wednesday criticised a US move to eject it and other African countries from accessing a tariff-free trade programme, saying the action was to punish African countries that are resisting the imposition of the West's cultural values. US President Joe Biden said on Monday that he intended to end the participation of Uganda, Gabon, Niger and the Central African Republic in the African Growth and Opportunity Act (AGOA) trade...

05 November 2023

You are here: Home/News/Article/AGOA forum to remain in SA, country says, despite US push to punish SA