- African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/Letter from Washington: 'Turning to East poses no solution for South Africa’s woes'

Letter from Washington: 'Turning to East poses no solution for South Africa’s woes'

Letter from Washington: 'Turning to East poses no solution for South Africa’s woes'
Published date:
Thursday, 14 January 2016
Simon Barber

...I refer to African National Congress spokesman Zizi Kodwa’s response, as reported by the official Chinese news agency, Xinhua, and tweeted by Sidwell Medupe, spokesman for the Department of Trade and Industry, to Obama’s Monday night proclamation regarding SA’s continued enjoyment of US trade preferences under the African Growth and Opportunity Act (Agoa).

The precise words Xinhua attributes to Kodwa are these: "We cannot allow to be bullied, that’s why many countries are looking at South-South relations and looking East because you can’t use the size of your economy to squeeze small economies." There seems to be something missing after "allow" — "ourselves", perhaps. But the sense is clear.

The US is bullying no one with Agoa, Mr Kodwa. Agoa is a unilateral gift of US market share that many in the US Congress including members of the Black Caucus, were at first unwilling to grant, seeing it as a threat to their own constituents’ livelihoods.

Yes, the gift comes with a few strings attached, but SA does not have to accept Agoa preferences if it believes the strings are too costly to its own interests or impinge upon its sovereignty. Agoa’s purpose was never to prise open SA’s markets, let alone wipe out South African manufacturing and agriculture with cheap imports. It was, and is, to help all Africa’s economies — or at least the majority that meet basic eligibility criteria — grow by giving their exports a leg-up against competitors, including China, in the US market, still the world’s largest.

It is true that SA has always been something of a outlier among Agoa beneficiaries. Its economy is by far the most sophisticated. That is why, from the outset, the US wanted to move on to a free trade agreement. Talks deadlocked. Rightly or wrongly — the truth lies between — the US came away feeling SA was happy to freeload off Agoa rather than engage in the tough give-and-take of a free trade agreement negotiation.

Well before Agoa came up for renewal last year, there was talk of graduating SA, or at least using the process to get SA’s attention on market access issues lobbies had been flagging to Congress and the US Trade Representative’s office, in some cases for years without result. There was nothing secret about Washington’s impatience.

Or surprising. After all, here was the US and its hyperproductive poultry sector all but shut out of the SA market since 2001 by questionable antidumping duties, while SA imports quadrupled to about 400,000 tonnes a year, principally from Brazil and the European Union. All the US wanted was the chance to compete for a reasonable share of SA’s import requirement. And since SA needs imports to supply demand, wouldn’t more competition between exporters be in SA’s interest to keep the price of those imports down?

Now I suppose if the US intention really was to destroy SA’s poultry industry while spreading disease to consumers and livestock, you might reasonably characterise Obama’s threat to reimpose normal duties on SA’s oranges as bullying.

But all he is asking is that SA implement undertakings from which SA itself gains. When someone willingly beats their head against a brick wall, as SA has been doing, you cannot accuse the wall of not playing fair.

As for Kodwa’s suggestion that the East — read China — does not put the squeeze on small economies, he might like to ask Vietnam why it has been so eager to join the Trans-Pacific Partnership with the US. He might ponder how voluntary has been his party’s surrender of Nelson Mandela’s commitment to a foreign policy rooted in human rights. By the way, how many jobs in SA has China created, net?

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/Letter from Washington: 'Turning to East poses no solution for South Africa’s woes'