South Africa and the US aim to put AGOA storm behind them
The coming AGOA forum, intended to map the way forward for US-SA trade relations, presents an opportunity for SA and the US to move on from the diplomatic storm stemming from perceptions that Pretoria sides with Russia in its war on Ukraine, says a top Washington official.
SA-US tension escalated in May after US ambassador to Pretoria Reuben Brigety accused SA of providing arms to Russia in December 2022.
The presidency released a report in September on a finding that there was no evidence that SA supplied arms to Russia or that weapon were loaded on the ship Lady R for export.
This raised speculation that SA would expel Brigety. The speculation was shot down by US embassy spokesperson David Feldmann, who previously told Business Day that US secretary of state Antony Blinken retains full confidence in Brigety.
US consul-general Vincent Spera says the Agoa [African Growth and Opportunity Act] forum, to be hosted by SA in November, is about “potential and moving forward and building on the strengths of our relationship”.
“The Agoa forum is about prosperity. If you look at the overall US-SA relationship, the engagement between the two countries is only expanding ... we are very proud of our strategic relationship with SA and are committed to continue,” he said on Wednesday.
Spera spoke to Business Day on the sidelines of the Gauteng provincial government’s briefing on its trade mission to the US in September.
The Agoa trade pact gives preferential access for some SA products to the US markets. The present 10-year cycle ends in 2025.
SA’s stance on the Ukraine war raised fear that SA could be excluded from the deal, with some US legislators asking the US government to reconsider Pretoria hosting the 2023 Agoa Forum due to its alleged closeness to Russia.
The fears of SA being kicked out of Agoa, which provides preferential access for about 20% of SA exports to the US, or 2% of SA exports globally, or the forum being moved to another country have since subsided.
Business Day previously reported that Standard Bank CEO Sim Tshabalala told the bank’s shareholders that Ramaphosa’s visits to Moscow and Kyiv as well as the government-led visit to the US to explain SA’s stance on the war reduced the risk of SA being excluded from Agoa benefits.
In July, trade, industry & competition minister Ebrahim Patel led an SA delegation to the US to persuade Washington that SA should remain a part of the Agoa trade pact, and to discuss preparations for the Agoa Forum.
Discussions between SA and US representatives included a request by Pretoria for an early extension of Agoa which would provide policy certainty for investors.
Spera said the US would focus the discussions with the beneficiaries of Agoa at the coming forum on a “tactical, practical way for businesses and civil society to share best practices”.
Gauteng economic development MEC Tasneem Motara says the provincial government expects the Agoa Forum to have more participants than the Brics summit in August, bringing in much needed business tourism to the country’s economic hub. Motara says SA is in Agoa until the present dispensation ends, and the country has two years to take advantage of it.“What is left now is the eligibility criteria and that is a US Congress determination,” she said.
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